Companies with strong earnings growth and low PE; do you have it in your portfolio?

EPS stands for “Earnings Per Share.” It is a financial metric used to assess the profitability of a company and is often reported by publicly traded companies in their financial statements. EPS represents the portion of a company’s profit allocated to each outstanding share of common stock.

EPS is calculated by dividing the net income of a company by the total number of outstanding shares.

It is an important financial metric as it provides an indication of a company’s profitability on a per-share basis. It is widely used by investors, analysts, and financial institutions to evaluate the financial performance of a company and compare it to other companies in the same industry. Higher EPS generally indicates better profitability, although it should be considered in conjunction with other financial indicators to get a comprehensive view of a company’s financial health.

The following list showcases the top 10 companies that have achieved significant EPS growth in FY23, with a market capitalization exceeding Rs 15,000 Crore. These companies have demonstrated remarkable advancements in their EPS compared to the previous financial year.

Presented below are the top 10 companies that have exhibited substantial growth in EPS during FY23, with a market capitalization of less than Rs 15,000 Crore. These companies have achieved noteworthy enhancements in their EPS when compared to the previous financial year.

This is not the sole parameter for which investors should look. There are various other parameters to check while taking investment decisions. In the short term, the market behaves like a voting machine, but in the long term, it behaves like a weighing machine. Therefore, it is expected that the share price will eventually align with the EPS results. This is why most successful long-term investors view EPS growth as a significant positive factor. To validate a company’s growth, it is worthwhile to examine the growth in its revenue and operating profit margins. 

Shareholders can find reassurance in observing improvements in an operating margin alongside revenue growth. These two metrics serve as valuable indicators to confirm the potential for future expansion.