High ROE and ROCE are good signs for a company because they show it is making the most of its money. ROE measures how well the company uses shareholders’ funds to earn profit, while ROCE shows how efficiently it uses all its capital. When both are strong, it means the company is profitable and well-managed, making its stock more attractive to investors.
The following micro-cap stocks reflect strong ROE and ROCE:
TPL Plastech Limited
TPL Plastech Limited is engaged in the production and sale of polymer products. The company has a manufacturing plant in Silvassa that produces high-density polyethylene containers and blow-moulded products.
The company has a market capitalization of Rs.591.50 crore, and closed at Rs.75.83, up by 0.13 percent from the previous close of Rs.75.73. In Q1FY26, the company’s revenue rose to Rs.90.40 crore from Rs.77.16 crore in Q1FY25, but its net profit rose to Rs.5.47 crore, up from Rs.4.48 crore in the same quarter last year.
The company has a return on equity of 17 percent and a return on capital employed of 19.8 percent. Its price-to-earnings ratio is 23.53, slightly above the industry average of 23.01.
Highway Infrastructure Limited
The company is engaged in infrastructure projects in Indore, Madhya Pradesh, including the construction of roads, highways, bypasses, expressways, bridges, flyovers, and residential buildings.
The company has a market capitalization of Rs.627.70 crore, and closed at Rs.87.52, down by 3.26 percent from the previous close of Rs.90.47. In Q1FY26, the company’s revenue rose to Rs.113.60 crore from Rs.82.28 crore in Q1FY25, and net profit rose to Rs.7.20 crore, up from Rs.3.16 crore in the same quarter last year.
The company has a return on equity of 18.8 percent and a return on capital employed of 19.6 percent. Its price-to-earnings ratio is 32.23, flat with the industry average of 32.23.
Kamat Hotels Limited
Kamat Hotels India Ltd, part of the Kamats Group, operates in the hospitality sector and offers related services such as hotel consultancy. The company has a market capitalization of Rs.912.85 crore, and closed at Rs.309.65, down by 0.42 percent from the previous close of Rs.310.95. In Q1FY26, the company’s revenue rose to Rs.82.65 crore from Rs.73.76 crore in Q1FY25, but its net profit rose to Rs.4.23 crore, up from Rs. 1.07 crore in the same quarter last year.
The company has a return on equity of 18.5 percent and a return on capital employed of 19.5 percent. Its price-to-earnings ratio is 18.30, below the industry average of 37.82.
Zodiac Energy Limited
Zodiac Energy Limited is an energy solutions company that offers complete solar power services, handling projects from initial planning to final commissioning for power companies.
The company has a market capitalization of Rs.591.41 crore, and closed at Rs.391.05, down by 2.48 percent from the previous close of Rs.401. In Q1FY26, the company’s revenue rose to Rs.98.05 crore from Rs.79.34 crore in Q1FY25, and net profit rose to Rs.2.69 crore from Rs.2.33 crore in the same quarter last year.
The company has a return on equity of 27.5 percent and a return on capital employed of 20 percent. Its price-to-earnings ratio is 28.83, above the industry average of 20.61, indicating the stock may be overvalued compared to peers.
Written by: Jhanavi Sivakumar
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