What does PAT growth entail?
Ans:
Analysts compare this year's PAT to last year's PAT, this quarter to last quarter, or this quarter to the similar quarter the previous year. Divide the difference by the previous period's PAT, then multiply by 100. This calculates the percentage growth rate between the two time periods.
As an illustration, consider the following scenario.
Assume your company earned ₹ 4,00,000 in net profit last year and ₹ 4,80,000 this year. There is an ₹ 80,000 differential in the two years.
You get 0.2 if you divide this by last year's PAT, which was ₹ 4,00,000.
When you multiply this number by 100, you get a net income increase of 20% over the previous year.