A company has Net Profit Attributable to Equity Shareholders of Rs. 50 crore with 1,00,00,000 weighted average basic equity shares outstanding. It has 20,00,000 in-the-money stock options (ESOPs) with no additional earnings adjustment. What are the Basic EPS and Diluted EPS of the company?

[ A ]Basic EPS is Rs. 50.00 per share; Diluted EPS is Rs. 41.67 per share[ CORRECT ]

[ B ]Basic EPS is Rs. 41.67 per share; Diluted EPS is Rs. 50.00 per share

[ C ]Both Basic and Diluted EPS are exactly Rs. 25.00 per share

[ D ]Basic EPS is Rs. 50.00 per share; Diluted EPS is Rs. 100.00 per share

Takeaway

Option A is correct: Basic EPS is Rs. 50.00 per share; Diluted EPS is Rs. 41.67 per share

Derivation

Basic EPS = Net Profit / Weighted Average Basic Shares = Rs. 50,00,00,000 / 1,00,00,000 shares = Rs. 50.00 per share. Diluted EPS factors in the potential dilution from all in-the-money convertible instruments, options, and warrants as if they were converted into equity: Diluted Shares = Basic Shares (1,00,00,000) + Option Shares (20,00,000) = 1,20,00,000 shares. Diluted EPS = Rs. 50,00,00,000 / 1,20,00,000 shares = Rs. 41.666 (approx Rs. 41.67 per share). This tests EPS dilution mechanics under IndAS 33. The common error is inverting Basic and Diluted EPS.

Why the others fail

B — Basic EPS is Rs. 41.67 per share; Diluted EPS is Rs. 50.00 per share

This option reverses the metrics; Diluted EPS is always lower than or equal to Basic EPS due to the expanded share count.

C — Both Basic and Diluted EPS are exactly Rs. 25.00 per share

Rs. 25.00 assumes share count doubled to 2 crore shares, which contradicts the stated 1.20 crore diluted shares.

D — Basic EPS is Rs. 50.00 per share; Diluted EPS is Rs. 100.00 per share

Diluted EPS cannot exceed Basic EPS; dilutive potential shares expand the denominator and reduce per-share earnings.