Here's Why We Think Shivalik Bimetal Controls (NSE:SBCL) Might Deserve Your Attention Today

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

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 Shivalik Bimetal Controls (NSE:SBCL). 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 Shivalik Bimetal Controls

Shivalik Bimetal Controls' Improving Profits

In the last three years Shivalik Bimetal Controls' earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. To the delight of shareholders, Shivalik Bimetal Controls' EPS soared from ₹9.57 to ₹13.73, over the last year. That's a impressive gain of 44%.

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. While we note Shivalik Bimetal Controls achieved similar EBIT margins to last year, revenue grew by a solid 45% to ₹4.7b. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

While it's always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check Shivalik Bimetal Controls' balance sheet strength, before getting too excited.

Are Shivalik Bimetal Controls Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shivalik Bimetal Controls followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. Given insiders own a significant chunk of shares, currently valued at ₹7.0b, they have plenty of motivation to push the business to succeed. That holding amounts to 21% of the stock on issue, thus making insiders influential owners of the business and aligned with the interests of shareholders.

Does Shivalik Bimetal Controls Deserve A Spot On Your Watchlist?

For growth investors, Shivalik Bimetal Controls' raw rate of earnings growth is a beacon in the night. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. Now, you could try to make up your mind on Shivalik Bimetal Controls by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.

Although Shivalik Bimetal Controls 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.