Here's Why We Think Vishwaraj Sugar Industries (NSE:VISHWARAJ) Might Deserve Your Attention Today

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Vishwaraj Sugar Industries (NSE:VISHWARAJ). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

Check out our latest analysis for Vishwaraj Sugar Industries

How Fast Is Vishwaraj Sugar Industries Growing Its Earnings Per Share?

Vishwaraj Sugar Industries has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. Impressively, Vishwaraj Sugar Industries' EPS catapulted from ₹1.33 to ₹3.39, over the last year. It's not often a company can achieve year-on-year growth of 155%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for Vishwaraj Sugar Industries remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 9.8% to ₹5.5b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Vishwaraj Sugar Industries isn't a huge company, given its market capitalisation of ₹3.4b. That makes it extra important to check on its balance sheet strength.

Are Vishwaraj Sugar Industries Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So we're pleased to report that Vishwaraj Sugar Industries insiders own a meaningful share of the business. Actually, with 35% of the company to their names, insiders are profoundly invested in the business. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. Although, with Vishwaraj Sugar Industries being valued at ₹3.4b, this is a small company we're talking about. So despite a large proportional holding, insiders only have ₹1.2b worth of stock. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.

Should You Add Vishwaraj Sugar Industries To Your Watchlist?

Vishwaraj Sugar Industries' earnings have taken off in quite an impressive fashion. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Vishwaraj Sugar Industries very closely. Still, you should learn about the 3 warning signs we've spotted with Vishwaraj Sugar Industries (including 1 which is potentially serious).

Although Vishwaraj Sugar Industries certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.