All the investment stalwarts are vocal about one thing in common- a business is considered efficient if your re-investment is able to yield the present ROE or a higher ROE. This company has proved that from 2010 and that’s why it is rated high and Prof has increased his stake @ Rs 441/- and Rs 696/-. Where that trend falters, we need to review.
Investment is based on business and its future and not on accounting unless balance sheet and cashflow reveals some major fraud. P&L plays only a minor role as compared to B/S and CF. Financials are only a confirmation that everything is OK and an investor need to know differentiate between minor and major issues. Too much of financial analysis or trying to base investments on screeners will not help. Try to recall what happened in KSCL. The share has fallen based on future business uncertainties but not on accounting .
Discl : I have a strong conviction and invested heavily and my view can be taken as biased.