Bharat Rasayan's (NSE:BHARATRAS) Wonderful 737% Share Price Increase Shows How Capitalism Can Build Wealth

Bharat Rasayan Limited (NSE:BHARATRAS) shareholders might be concerned after seeing the share price drop 11% in the last quarter. But that does not change the realty that the stock's performance has been terrific, over five years. In fact, during that period, the share price climbed 737%. Impressive! Arguably, the recent fall is to be expected after such a strong rise. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain.

Anyone who held for that rewarding ride would probably be keen to talk about it.

See our latest analysis for Bharat Rasayan

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During five years of share price growth, Bharat Rasayan achieved compound earnings per share (EPS) growth of 40% per year. This EPS growth is slower than the share price growth of 53% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. That's not necessarily surprising considering the five-year track record of earnings growth.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Bharat Rasayan's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Bharat Rasayan shareholders have received a total shareholder return of 39% over the last year. That's including the dividend. Having said that, the five-year TSR of 53% a year, is even better. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

Of course Bharat Rasayan may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

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This article by Simply Wall St is general in nature. 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.
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