Fundamental AnalysisBeginner
EPS
Earnings Per Share
The company's net profit divided across each outstanding share.
Detailed explanation
EPS converts total profit into a per-share number so shareholders can see what one share earned. Diluted EPS additionally counts shares that could be created by options or convertibles, which is the more conservative figure.
Formula
EPS = (Net profit − Preference dividend) / Weighted average shares outstanding
Example
Net profit of ₹400 crore across 10 crore shares gives an EPS of ₹40.
Why it matters
EPS growth, not revenue growth, is what ultimately supports a higher share price — and it is the denominator of the P/E ratio.
Key points
- Buybacks raise EPS without any improvement in the business.
- Always check diluted EPS alongside basic EPS.
- One-off gains can inflate a single quarter.
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Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.