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 * NSEI:GPPL


INVESTORS MORE BULLISH ON GUJARAT PIPAVAV PORT (NSE:GPPL) THIS WEEK AS STOCK
ADVANCES 8.5%, DESPITE EARNINGS TRENDING DOWNWARDS OVER PAST THREE YEARS

Simply Wall St
Published April 01, 2023

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The worst result, after buying shares in a company (assuming no leverage), would
be if you lose all the money you put in. But if you buy shares in a really great
company, you can more than double your money. For example, the Gujarat Pipavav
Port Limited (NSE:GPPL) share price has soared 112% in the last three years.
Most would be happy with that. It's also good to see the share price up 16% over
the last quarter.

Since it's been a strong week for Gujarat Pipavav Port shareholders, let's have
a look at trend of the longer term fundamentals.

See our latest analysis for Gujarat Pipavav Port

To paraphrase Benjamin Graham: Over the short term the market is a voting
machine, but over the long term it's a weighing machine. One way to examine how
market sentiment has changed over time is to look at the interaction between a
company's share price and its earnings per share (EPS).

During the three years of share price growth, Gujarat Pipavav Port actually saw
its earnings per share (EPS) drop 3.5% per year.

Companies are not always focussed on EPS growth in the short term, and looking
at how the share price has reacted, we don't think EPS is the most important
metric for Gujarat Pipavav Port at the moment. So other metrics may hold the key
to understanding what is influencing investors.

We doubt the dividend payments explain the share price rise, since we don't see
any improvement in that regard. But it's far more plausible that the revenue
growth of 5.4% per year is viewed as evidence that Gujarat Pipavav Port is
growing. It could be that investors are content with the revenue growth on the
basis that the company isn't really focussed on profits just yet. And that might
explain the higher price.

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

NSEI:GPPL Earnings and Revenue Growth April 1st 2023

We know that Gujarat Pipavav Port has improved its bottom line lately, but what
does the future have in store? You can see what analysts are predicting for
Gujarat Pipavav Port in this interactive graph of future profit estimates.


WHAT ABOUT DIVIDENDS?

When looking at investment returns, it is important to consider the difference
between total shareholder return (TSR) and share price return. Whereas the share
price return only reflects the change in the share price, the TSR includes the
value of dividends (assuming they were reinvested) and the benefit of any
discounted capital raising or spin-off. Arguably, the TSR gives a more
comprehensive picture of the return generated by a stock. As it happens, Gujarat
Pipavav Port's TSR for the last 3 years was 151%, which exceeds the share price
return mentioned earlier. The dividends paid by the company have thusly boosted
the total shareholder return.


A DIFFERENT PERSPECTIVE

It's good to see that Gujarat Pipavav Port has rewarded shareholders with a
total shareholder return of 57% in the last twelve months. And that does include
the dividend. Since the one-year TSR is better than the five-year TSR (the
latter coming in at 0.9% per year), it would seem that the stock's performance
has improved in recent times. Someone with an optimistic perspective could view
the recent improvement in TSR as indicating that the business itself is getting
better with time. 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. To that end, you should be aware of the 1 warning sign
we've spotted with Gujarat Pipavav Port .

For those who like to find winning investments this free list of growing
companies with recent insider purchasing, could be just the ticket.

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


VALUATION IS COMPLEX, BUT WE'RE HELPING MAKE IT SIMPLE.

Find out whether Gujarat Pipavav Port 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.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us
directly. Alternatively, email editorial-team (at) simplywallst.com.

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.


ABOUT NSEI:GPPL

GUJARAT PIPAVAV PORT

Gujarat Pipavav Port Limited engages in the construction, operation, and
maintenance of port at Pipavav in Gujarat, India.

See The Free Research Report

Flawless balance sheet with acceptable track record.

See The Free Research Report


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