Does Dalmia Bharat (NSE: DALBHARAT) deserve a spot on your watchlist?
Some have more money than common sense, they say, so even companies with no income, no profit, and a history of failure can easily find investors. But as Peter Lynch put it in One Up on Wall Street, ‘Long shots hardly ever pay off.’
If, on the other hand, you like businesses that have revenue, and even profits, then you might be interested in Dalmia Bharat (NSE: DALBHARAT). While profit isn’t necessarily social good, it’s easy to admire a business that can consistently produce it. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when in a hurry.
See our latest review for Dalmia Bharat
Improved profits of Dalmia Bharat
Over the past three years, Dalmia Bharat has increased her earnings per share (EPS) like a bamboo sapling after the rain; fast, and from a low base. So I don’t think the percentage growth rate is particularly significant. As a result, I’ll zoom in on last year’s growth instead. Like a firecracker in the night sky, Dalmia Bharat’s EPS has increased from 24.69 to 66.69, over the past year. An annual growth of 170% is certainly a sight to behold.
One way to check how a business is growing is to look at how its income and profit before interest and tax (EBIT) have changed. While we note that Dalmia Bharat’s EBIT margins were stable over the past year, revenues increased 24% to 115 billion yen. It is progress.
You can take a look at the company’s revenue and profit growth trend, in the graph below. To see the actual numbers, click on the graph.
Fortunately, we have access to forecasts from analysts at Dalmia Bharat future profits. You can make your own predictions without looking, or you can take a look at what the pros are predicting.
Are Dalmia Bharat Insiders Aligned With All Shareholders?
I feel more secure owning shares in a company if insiders also own shares, thereby aligning our interests more closely. Accordingly, I am encouraged that the initiates own Dalmia Bharat shares of considerable value. To be precise, they have 2.0 billion yen of stock. That’s a lot of money, and that’s no small incentive to work hard. Even though that’s only about 0.6% of the business, it’s enough money to indicate the alignment between the company’s executives and common shareholders.
Does Dalmia Bharat deserve a place on your watch list?
Dalmia Bharat’s profits took off like any random cryptocurrency, in 2017. This type of growth is simply eye-catching, and the large investment held by insiders certainly informs my view of the business. The hope is, of course, that the strong growth marks a fundamental improvement in the business economy. So yes, on this short review, I think it’s worth considering Dalmia Bharat for a place on your watch list. It is also necessary to consider the ever-present specter of investment risk. We have identified 1 warning sign with Dalmia Bharat, and understanding it should be part of your investment process.
While Dalmia Bharat certainly looks good to me, I would like more insiders to buy stocks. If you also like to see insiders buy, then this free list of growing companies that insiders are buying, might be exactly what you are looking for.
Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.
Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.