The past one-year earnings decline for N R Agarwal Industries (NSE:NRAIL) likely explains shareholders long-term losses

N R Agarwal Industries Limited (NSE:NRAIL) shareholders should be happy to see the share price up 15% in the last month. But in truth the last year hasn't been good for the share price. In fact the stock is down 46% in the last year, well below the market return.

While the last year has been tough for N R Agarwal Industries shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

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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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unhappily, N R Agarwal Industries had to report a 69% decline in EPS over the last year. The share price fall of 46% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on N R Agarwal Industries' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

N R Agarwal Industries shareholders are down 45% for the year (even including dividends), but the market itself is up 3.5%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand N R Agarwal Industries better, we need to consider many other factors. Even so, be aware that N R Agarwal Industries is showing 5 warning signs in our investment analysis , and 2 of those are a bit concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.