Stock Analysis

Here's Why We Think Puravankara Limited's (NSE:PURVA) CEO Compensation Looks Fair for the time being

NSEI:PURVA
Source: Shutterstock

Key Insights

  • Puravankara's Annual General Meeting to take place on 27th of September
  • Total pay for CEO Abhishek Kapoor includes ₹40.7m salary
  • Total compensation is similar to the industry average
  • Puravankara's total shareholder return over the past three years was 281% while its EPS was down 24% over the past three years

Performance at Puravankara Limited (NSE:PURVA) has been reasonably good and CEO Abhishek Kapoor has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 27th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Here is our take on why we think the CEO compensation looks appropriate.

Check out our latest analysis for Puravankara

Comparing Puravankara Limited's CEO Compensation With The Industry

Our data indicates that Puravankara Limited has a market capitalization of ₹106b, and total annual CEO compensation was reported as ₹43m for the year to March 2024. Notably, that's an increase of 13% over the year before. Notably, the salary which is ₹40.7m, represents most of the total compensation being paid.

On comparing similar companies from the Indian Real Estate industry with market caps ranging from ₹84b to ₹267b, we found that the median CEO total compensation was ₹34m. From this we gather that Abhishek Kapoor is paid around the median for CEOs in the industry. What's more, Abhishek Kapoor holds ₹5.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20242023Proportion (2024)
Salary ₹41m ₹38m 94%
Other ₹2.7m ₹21k 6%
Total Compensation₹43m ₹38m100%

On an industry level, roughly 99% of total compensation represents salary and 0.5074122% is other remuneration. Our data reveals that Puravankara allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
NSEI:PURVA CEO Compensation September 21st 2024

A Look at Puravankara Limited's Growth Numbers

Puravankara Limited has reduced its earnings per share by 24% a year over the last three years. It achieved revenue growth of 87% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Puravankara Limited Been A Good Investment?

Most shareholders would probably be pleased with Puravankara Limited for providing a total return of 281% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We reckon that there are some shareholders who may be hesitant to increase CEO pay further until EPS growth starts to improve, despite the robust revenue growth.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Puravankara you should be aware of, and 2 of them can't be ignored.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.