Little Excitement Around Vishnusurya Projects and Infra Limited's (NSE:VISHNUINFR) Earnings As Shares Take 28% Pounding

Vishnusurya Projects and Infra Limited (NSE:VISHNUINFR) shares have retraced a considerable 28% in the last month, reversing a fair amount of their solid recent performance. Still, a bad month hasn't completely ruined the past year with the stock gaining 82%, which is great even in a bull market.

Although its price has dipped substantially, Vishnusurya Projects and Infra's price-to-earnings (or "P/E") ratio of 23.6x might still make it look like a buy right now compared to the market in India, where around half of the companies have P/E ratios above 33x and even P/E's above 62x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/E.

The recent earnings growth at Vishnusurya Projects and Infra would have to be considered satisfactory if not spectacular. One possibility is that the P/E is low because investors think this good earnings growth might actually underperform the broader market in the near future. If that doesn't eventuate, then existing shareholders may have reason to be optimistic about the future direction of the share price.

Check out our latest analysis for Vishnusurya Projects and Infra

Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Vishnusurya Projects and Infra will help you shine a light on its historical performance.

Is There Any Growth For Vishnusurya Projects and Infra?

The only time you'd be truly comfortable seeing a P/E as low as Vishnusurya Projects and Infra's is when the company's growth is on track to lag the market.

Taking a look back first, we see that the company managed to grow earnings per share by a handy 6.4% last year. The latest three year period has also seen an excellent 69% overall rise in EPS, aided somewhat by its short-term performance. Therefore, it's fair to say the earnings growth recently has been superb for the company.

Comparing that to the market, which is predicted to deliver 26% growth in the next 12 months, the company's momentum is weaker based on recent medium-term annualised earnings results.

With this information, we can see why Vishnusurya Projects and Infra is trading at a P/E lower than the market. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the bourse.

What We Can Learn From Vishnusurya Projects and Infra's P/E?

Vishnusurya Projects and Infra's recently weak share price has pulled its P/E below most other companies. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

We've established that Vishnusurya Projects and Infra maintains its low P/E on the weakness of its recent three-year growth being lower than the wider market forecast, as expected. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.

Having said that, be aware Vishnusurya Projects and Infra is showing 4 warning signs in our investment analysis, and 2 of those are significant.

If you're unsure about the strength of Vishnusurya Projects and Infra's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.

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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.