Earnings growth outpaced the decent 91% return delivered to Indus Towers (NSE:INDUSTOWER) shareholders over the last year

It hasn't been the best quarter for Indus Towers Limited (NSE:INDUSTOWER) shareholders, since the share price has fallen 14% in that time. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. Looking at the full year, the company has easily bested an index fund by gaining 91%.

Since the stock has added ₹40b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Indus Towers

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Indus Towers grew its earnings per share (EPS) by 127%. This EPS growth is significantly higher than the 91% increase in the share price. Therefore, it seems the market isn't as excited about Indus Towers as it was before. This could be an opportunity.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

We're pleased to report that Indus Towers shareholders have received a total shareholder return of 91% over one year. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. Before deciding if you like the current share price, check how Indus Towers scores on these 3 valuation metrics.

We will like Indus Towers 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.