The market shrugged off Power & Instrumental (Gujarat) Limited's (NSE:PIGL) solid earnings report. We think that investors might be worried about some concerning underlying factors. One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. As it happens, Power & Instrumental (Gujarat) issued 32% more new shares over the last year. Therefore, each share now receives a smaller portion of profit. To celebrate net income while ignoring dilution is like rejoicing because you have a single slice of a larger pizza, but ignoring the fact that the pizza is now cut into many more slices. Check out Power & Instrumental (Gujarat)'s historical EPS growth by clicking on this link. How Is Dilution Impacting Power & Instrumental (Gujarat)'s Earnings Per Share (EPS)? Power & Instrumental (Gujarat) has improved its profit over the last three years, with an annualized gain of 299% in that time. But EPS was only up 36% per year, in the exact same period. And the 23% profit boost in the last year certainly seems impressive at first glance. But that's starkly different from the 32% drop in earnings per share. Therefore, one can observe that the dilution is having a fairly profound effect on shareholder returns. If Power & Instrumental (Gujarat)'s EPS can grow over time then that drastically improves the chances of the share price moving in the same direction. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. Our Take On Power & Instrumental (Gujarat)'s Profit Performance Each Power & Instrumental (Gujarat) share now gets a meaningfully smaller slice of its overall profit, due to