Introducing GMR Infrastructure (NSE:GMRINFRA), A Stock That Climbed 72% In The Last Five Years

Stock pickers are generally looking for stocks that will outperform the broader market. And the truth is, you can make significant gains if you buy good quality businesses at the right price. To wit, the GMR Infrastructure share price has climbed 72% in five years, easily topping the market return of 39% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 16% in the last year.

See our latest analysis for GMR Infrastructure

Given that GMR Infrastructure 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last half decade GMR Infrastructure's revenue has actually been trending down at about 7.6% per year. Even though revenue hasn't increased, the stock actually gained 11%, per year, during the same period. To us that suggests that there probably isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on GMR Infrastructure's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that GMR Infrastructure shareholders have received a total shareholder return of 16% over one year. That gain is better than the annual TSR over five years, which is 11%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand GMR Infrastructure better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for GMR Infrastructure you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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This article by Simply Wall St is general in nature. 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.
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