Stock Analysis

Reliance Infrastructure (NSE:RELINFRA) delivers shareholders splendid 29% CAGR over 3 years, surging 10% in the last week alone

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NSEI:RELINFRA
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It hasn't been the best quarter for Reliance Infrastructure Limited (NSE:RELINFRA) shareholders, since the share price has fallen 17% in that time. But that doesn't change the fact that the returns over the last three years have been very strong. The share price marched upwards over that time, and is now 114% higher than it was. To some, the recent share price pullback wouldn't be surprising after such a good run. Only time will tell if there is still too much optimism currently reflected in the share price.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

See our latest analysis for Reliance Infrastructure

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During three years of share price growth, Reliance Infrastructure moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
NSEI:RELINFRA Earnings Per Share Growth July 13th 2022

It might be well worthwhile taking a look at our free report on Reliance Infrastructure's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Reliance Infrastructure shareholders have received a total shareholder return of 25% over the last year. That certainly beats the loss of about 12% 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. It's always interesting to track share price performance over the longer term. But to understand Reliance Infrastructure better, we need to consider many other factors. Take risks, for example - Reliance Infrastructure has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether Reliance Infrastructure is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About NSEI:RELINFRA

Reliance Infrastructure

Reliance Infrastructure Limited, an infrastructure company, generates, transmits, and distributes electrical power to residential, industrial, commercial, and other consumers in India.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth0
Past Performance0
Financial Health4
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Good value with adequate balance sheet.