Tinplate Company of India (NSE:TINPLATE) sheds 11% this week, as yearly returns fall more in line with earnings growth

By
Simply Wall St
Published
February 23, 2022
NSEI:TINPLATE
Source: Shutterstock

The Tinplate Company of India Limited (NSE:TINPLATE) shareholders might be concerned after seeing the share price drop 13% in the last month. But in stark contrast, the returns over the last half decade have impressed. Indeed, the share price is up an impressive 286% in that time. So while it's never fun to see a share price fall, it's important to look at a longer time horizon. Only time will tell if there is still too much optimism currently reflected in the share price.

Since the long term performance has been good but there's been a recent pullback of 11%, let's check if the fundamentals match the share price.

See our latest analysis for Tinplate Company of India

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

Over half a decade, Tinplate Company of India managed to grow its earnings per share at 59% a year. The EPS growth is more impressive than the yearly share price gain of 31% over the same period. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 11.45.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
NSEI:TINPLATE Earnings Per Share Growth February 23rd 2022

It might be well worthwhile taking a look at our free report on Tinplate Company of India's earnings, revenue and cash flow.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Tinplate Company of India the TSR over the last 5 years was 309%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Tinplate Company of India shareholders have received a total shareholder return of 88% over the last year. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 33% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Tinplate Company of India better, we need to consider many other factors. Take risks, for example - Tinplate Company of India has 1 warning sign we think you should be aware of.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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