Synopsis: Indosolar, RRP Semiconductor, Ksolves India and the other three have their respective return ratios (ROE and ROCE) above 50 percent, highlighting strong use cases of their capital.
Investors chase companies that not only have high growth but also are efficient in their use of capital. In this article, we will look at five small-cap companies that are amazing in their performance, having both return on equity and return on capital employed higher than 50 percent.
Indosolar
Indosolar is a solar manufacturing company based in Noida and is part of the Waaree Group. It has a 1.3 GW advanced N-Type M10R and G12 module manufacturing facility. With the support of the largest solar module manufacturer in India, it is committed to using high-efficiency technology to help India in the clean-energy transition.
With a market capitalisation of Rs 2,317 crore, the stock is currently trading at Rs 557 per share. The company’s ROE of 420 percent and ROCE of 77 percent appear unusually high because of a one-time increase in reserves of Rs 162 crore, which significantly altered the equity base and inflated the return ratios for the quarter
Network People Services Technologies (NPST)
NPST is a technology fintech company that develops digital payment systems for banks and merchants. Their services include UPI transactions, mobile banking, credit-over-UPI solutions, bill payments, fraud detection, and offline payment tools. With the help of the company, banks are able to operate safe, quick, and up-to-date digital payment platforms.
With a market capitalisation of Rs 3,094 crore, the stock is currently trading at Rs 1,595 per share. It has delivered an exceptional ROE and ROCE of 56 percent and 69.2 percent respectively
Waaree Renewable Technologies
Waaree Renewable Technologies Ltd is a green-energy company that creates and runs solar energy projects in India. Its product portfolio includes EPC services, solar on rooftop and ground-mounted, floating solar, and O&M solutions. The business provides the energy needs of the residential sector, the industrial sector, and the commercial sector with clean energy at a competitive price.
With a market capitalisation of Rs 11,329 crore, the stock is currently trading at Rs 1,087 per share. It has delivered an exceptional ROE and ROCE of 65.6 percent and 82.3 percent respectively
International Gemmological Institute (India)
International Gemmological Institute (India) Limited is instrumental in providing certification and grading services for both natural and lab-grown diamonds, gemstones, and studded jewellery. Besides these, the company also provides diamond screening, sorting, and an array of value-added tests along with gemology education and training through its IGI Schools of Gemology.
With a market capitalisation of Rs 14,088 crore, the stock is currently trading at Rs 326 per share. It has delivered an exceptional ROE and ROCE of 54.4 percent and 68 percent respectively
Shilchar Technologies
Shilchar Technologies Limited manufactures power and distribution transformers, and electronic and telecommunication transformers applied in the power industry. It exports its products and has a diversified client base covering private utilities, renewable energy companies, EPC contractors, and sugar, steel, and hydrocarbon industries.
With a market capitalisation of Rs 4,850 crore, the stock is currently trading at Rs 4,239 per share. It has delivered an exceptional ROE and ROCE of 52.9 percent and 71.3 percent respectively.
Written by Satyajeet Mukherjee
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