Stock Analysis

India Power (NSE:DPSCLTD) Share Prices Have Dropped 65% In The Last Three Years

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NSEI:DPSCLTD
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If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the long term shareholders of India Power Corporation Limited (NSE:DPSCLTD) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 65% drop in the share price over that period. The falls have accelerated recently, with the share price down 18% in the last three months.

Check out our latest analysis for India Power

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

India Power saw its EPS decline at a compound rate of 25% per year, over the last three years. This fall in EPS isn't far from the rate of share price decline, which was 30% per year. So it seems like sentiment towards the stock hasn't changed all that much over time. It seems like the share price is reflecting the declining earnings per share.

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

earnings-per-share-growth
NSEI:DPSCLTD Earnings Per Share Growth December 23rd 2020

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 India Power shareholders have received a total shareholder return of 27% over one year. And that does include the dividend. That certainly beats the loss of about 1.7% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 3 warning signs for India Power (1 is concerning) that you should be aware of.

We will like India Power better if we see some big insider buys. While we wait, check out this free list of growing companies 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 IN exchanges.

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