Investors in Shalimar Paints (NSE:SHALPAINTS) from three years ago are still down 49%, even after 14% gain this past week

Shalimar Paints Limited (NSE:SHALPAINTS) shareholders should be happy to see the share price up 18% in the last month. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 49% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

The recent uptick of 14% could be a positive sign of things to come, so let's take a look at historical fundamentals.

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Given that Shalimar Paints 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, Shalimar Paints saw its revenue grow by 13% per year, compound. That's a pretty good rate of top-line growth. Shareholders have seen the share price fall at 14% per year, for three years. So the market has definitely lost some love for the stock. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Shalimar Paints' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 3.0% in the twelve months, Shalimar Paints shareholders did even worse, losing 40%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Shalimar Paints is showing 3 warning signs in our investment analysis , and 2 of those are potentially serious...

We will like Shalimar Paints better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.