Square Pharmaceuticals earns Tk 29.27 per share. Grameenphone earns Tk 21.90. BRAC Bank earns Tk 7.89. Yet BRAC Bank’s profit grew 73% last year while the other two managed 10% each. Which stock is actually generating the best earnings — and for whom?
The answer depends on understanding one number that appears on every DSE stock page but that most investors read wrong: Earnings Per Share.
The Formula Is Simple. The Interpretation Is Not.
EPS measures the portion of a company’s net profit allocated to each outstanding share of common stock. The calculation:
EPS = (Net Income − Preferred Dividends) ÷ Weighted Average Shares Outstanding
Take Square Pharmaceuticals. In FY2024, the company reported net profit of Tk 2,092.91 crore. Divide that by the weighted average number of shares outstanding, and you arrive at a trailing twelve-month EPS of Tk 29.27.
That single number tells you how much profit the company generated for every share you hold. But it does not tell you whether the stock is cheap or expensive — and this is where most DSE investors make their first mistake.
Square Pharma’s share price is Tk 217.30. BRAC Bank’s is Tk 75.30. A beginner might assume the more expensive stock is the better earner. But Square Pharma’s EPS of Tk 29.27 against its Tk 217.30 price gives it a P/E ratio of just 7.4x. BRAC Bank’s Tk 7.89 EPS against its Tk 75.30 price produces a P/E of 9.5x. The “cheaper” stock is actually more expensive per taka of earnings.
That distinction — between price and value — is exactly what EPS exists to clarify. But only when you use it correctly.
Three DSE Stocks, Three Different EPS Stories
Consider what EPS reveals across sectors on the DSE.
Grameenphone (GP) reports an EPS of Tk 21.90, backed by Tk 3,630 crore in net profit for FY2024. The telecom giant’s P/E sits at 11.6x — above the DSE average of roughly 10x. Investors pay a premium because GP’s earnings are consistent and its dividend yield of 11.0% is among the highest on the exchange. But there is a catch: GP’s payout ratio is 129%, meaning it pays more in dividends than it earns per share. That is sustainable only as long as the company maintains cash reserves or takes on debt to fund the gap.
Square Pharmaceuticals (SQURPHARMA) has the highest EPS of the three at Tk 29.27, the lowest P/E at 7.4x, and a net profit margin of 31.66% — exceptional by any standard. Its payout ratio of 41% is conservative, leaving the company room to reinvest. If you are screening for raw earnings efficiency on the DSE, Square Pharma stands out. The pharma sector has historically been a defensive play, and these numbers show why.
BRAC Bank (BRACBANK) tells a different story entirely. Its EPS of Tk 7.89 looks modest next to GP and Square Pharma. But the 73% profit growth in FY2024 — from a consolidated EPS of Tk 6.95 — signals a trajectory that the static EPS figure alone cannot capture. This is why experienced analysts never evaluate EPS as a snapshot. They track the trend. A low but rapidly growing EPS can signal more upside than a high but stagnant one, especially in the banking sector where cyclical recovery amplifies earnings.
Basic EPS vs. Diluted EPS — and Why It Matters
Most DSE investors look at basic EPS. That is the straightforward calculation: net income divided by actual shares outstanding.
Diluted EPS accounts for all potential shares — from stock options, warrants, convertible bonds — that could enter the market and reduce each existing share’s claim on earnings. Diluted EPS is always equal to or lower than basic EPS.
For most DSE-listed companies, the gap between basic and diluted EPS is small. But for companies with significant convertible instruments or employee stock option plans, the diluted figure is the more honest number. If a company reports basic EPS of Tk 15 but diluted EPS of Tk 11, those potential shares represent real dilution risk.
Always check which EPS a company’s financial statement is reporting. The difference can change your valuation math entirely.
What EPS Cannot Tell You
EPS has blind spots that matter on the DSE.
It does not account for capital structure. A company can inflate EPS through share buybacks — reducing the denominator without improving actual profitability. It does not distinguish between recurring earnings and one-time gains. A factory that sold land and booked a windfall will show inflated EPS that year, but the underlying business did not improve.
And EPS varies dramatically by sector. Comparing a bank’s EPS to a pharma company’s EPS without adjusting for sector norms is like comparing cricket batting averages across different pitch conditions.
The right approach: use EPS as the starting point, not the conclusion. Pair it with the P/E ratio for valuation context, check the NAV for asset backing, track the growth trend over three to five years, and compare within the same sector.
The Number That Starts the Conversation
EPS answers one question precisely: how much profit does this company generate per share? Square Pharma generates Tk 29.27. GP generates Tk 21.90. BRAC Bank generates Tk 7.89. Those numbers are facts.
But whether any of those stocks is worth buying at today’s price — that requires every other metric EPS was designed to work alongside. Start with earnings per share. Just never stop there.
Disclaimer: This article is for educational purposes only. It does not constitute investment advice. Stock market investments carry risk, and past performance does not guarantee future results. Consult a BSEC-licensed investment adviser before making financial decisions.