Where the other 28 points went.
| The line | Year 1 | Year 2 | Change |
|---|
| Net profit . Rs cr | 400 | 560 | +40 pct |
| Shares outstanding . cr | 10.0 | 12.5 | +25 pct |
| Earnings per share . Rs | 40.00 | 44.80 | +12 pct |
You held 10 lakh shares. That was 1.0 pct of the company. You still hold the same 10 lakh shares, but the company issued more, so your stake is now 0.8 pct. Your claim on profit went from Rs 4.00 cr to Rs 4.48 cr. Up 12, not 40.
The extra shares come from somewhere . a QIP to raise cash, an ESOP pool vesting, a convertible turning into stock, an acquisition paid in equity. Companies report basic EPS. The honest count is diluted EPS, which Ind AS 33 makes them also report. It folds in the shares that have not been issued yet but will be.