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Concerns Surrounding Balaji Telefilms' (NSE:BALAJITELE) Performance

Simply Wall St · 07/11 00:07

The recent earnings posted by Balaji Telefilms Limited (NSE:BALAJITELE) were solid, but the stock didn't move as much as we expected. We think this is due to investors looking beyond the statutory profits and being concerned with what they see.

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earnings-and-revenue-history
NSEI:BALAJITELE Earnings and Revenue History July 11th 2025

In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. Balaji Telefilms expanded the number of shares on issue by 18% over the last year. That means its earnings are split among a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Balaji Telefilms' historical EPS growth by clicking on this link.

How Is Dilution Impacting Balaji Telefilms' Earnings Per Share (EPS)?

Three years ago, Balaji Telefilms lost money. On the bright side, in the last twelve months it grew profit by 340%. On the other hand, earnings per share are only up 330% over the same period. And so, you can see quite clearly that dilution is influencing shareholder earnings.

Changes in the share price do tend to reflect changes in earnings per share, in the long run. So it will certainly be a positive for shareholders if Balaji Telefilms can grow EPS persistently. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Balaji Telefilms.

Our Take On Balaji Telefilms' Profit Performance

Each Balaji Telefilms share now gets a meaningfully smaller slice of its overall profit, due to dilution of existing shareholders. Because of this, we think that it may be that Balaji Telefilms' statutory profits are better than its underlying earnings power. The silver lining is that its EPS growth over the last year has been really wonderful, even if it's not a perfect measure. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. In terms of investment risks, we've identified 2 warning signs with Balaji Telefilms, and understanding these should be part of your investment process.

This note has only looked at a single factor that sheds light on the nature of Balaji Telefilms' profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.