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Titagarh Wagons Limited (NSE:TWL) shareholders should be happy to see the share price up 15% in the last month. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 28% in a year, falling short of the returns you could get by investing in an index fund.
See our latest analysis for Titagarh Wagons
Given that Titagarh Wagons didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Titagarh Wagons saw its revenue grow by 39%. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 28%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
This free interactive report on Titagarh Wagons's balance sheet strength is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Titagarh Wagons's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Titagarh Wagons's TSR, which was a 28% drop over the last year, was not as bad as the share price return.
A Different Perspective
Investors in Titagarh Wagons had a tough year, with a total loss of 28% (including dividends), against a market gain of about 4.5%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 3.4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. You could get a better understanding of Titagarh Wagons's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.