Despite currently being unprofitable, Nagarjuna Fertilizers and Chemicals (NSE:NAGAFERT) has delivered a 78% return to shareholders over 5 years

It might be of some concern to shareholders to see the Nagarjuna Fertilizers and Chemicals Limited (NSE:NAGAFERT) share price down 18% in the last month. But the silver lining is the stock is up over five years. Unfortunately its return of 78% is below the market return of 141%.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

Check out our latest analysis for Nagarjuna Fertilizers and Chemicals

Given that Nagarjuna Fertilizers and Chemicals didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, Nagarjuna Fertilizers and Chemicals can boast revenue growth at a rate of 31% per year. That's well above most pre-profit companies. It's nice to see shareholders have made a profit, but the gain of 12% over the period isn't that impressive compared to the overall market. You could argue the market is still pretty skeptical, given the growing revenues. It could be that the stock was previously over-priced - but if you're looking for underappreciated growth stocks, these numbers indicate that there might be an opportunity here.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Nagarjuna Fertilizers and Chemicals' financial health with this free report on its balance sheet.

A Different Perspective

Nagarjuna Fertilizers and Chemicals provided a TSR of 35% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 12% over half a decade It is possible that returns will improve along with the business fundamentals. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Nagarjuna Fertilizers and Chemicals has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

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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.