Return on Equity (RoE) is a key financial metric that measures a company’s profitability in relation to shareholders’ equity, and is calculated by dividing net income by average shareholders’ equity, expressed as a percentage.
This ratio indicates how effectively a company is utilising the capital invested by its shareholders to generate profits.
A higher ROE usually signifies greater efficiency in converting equity financing into net income, making it an important tool for investors assessing the financial health and performance of a business. However, it’s important to interpret RoE in context, as acceptable levels can vary significantly between different sectors.
Following are a few financially strong stocks under Rs. 100 with a high return on equity (RoE):
One Point One Solutions Limited
With a market cap of Rs. 1,555.7 crores, the shares of a leading player in Business Process Management (BPM) surged marginally by nearly 1 percent on NSE to Rs. 72.6 on Friday.
In terms of return ratios, One Point One Solutions Limited has reported a return on equity (ROE) of 21.6 percent, and a return on capital employed (ROCE) of 22.3 percent. Additionally, the company’s debt-to-equity ratio stands at 0.42.
The company’s revenue from operations stood at Rs. 61.15 crores in Q1 FY25, rising by 71.2 percent YoY from Rs. 35.73 crores in Q1 FY24, and the net profit grew by 171.4 percent to Rs. 7.6 crores from Rs. 2.8 crores, during the same period.
The stock has delivered positive returns of nearly 99 percent in the last one year, as well as around 29.3 percent returns year-to-date.
Incorporated in 2006, One Point One Solutions Limited is mainly engaged in the business of BPO, Customer Life cycle management, Business Process Management and Technology Servicing.
Cupid Limited
With a market cap of Rs. 2,242 crores, the stock surged nearly 1.06 percent on BSE to Rs. 85.44 on Friday.
In terms of return ratios, Cupid Limited has reported a return on equity (ROE) of 20.8 percent, and a return on capital employed (ROCE) of 27.1 percent. Additionally, the company’s debt-to-equity ratio stands at 0.06.
The company’s revenue from operations stood at Rs. 44 crores in Q1 FY25, rising by 25 percent YoY from Rs. 35.2 crores in Q1 FY24, and the net profit grew by 277.3 percent to Rs. 8.3 crores from Rs. 2.2 crores, during the same period.
The stock has delivered multibagger returns of nearly 120.6 percent in the last one year, but around 27.4 percent of negative returns year-to-date.
Incorporated in 1993, Cupid Limited is principally engaged in the business of manufacturing and supplying male & female contraceptives, water-based lubricant jelly, In Vitro Diagnostic (IVD) Kits, and deodorants.
Lloyds Engineering Works Limited
With a market cap of Rs. 9,500.4 crores, the shares of a complete customised process plant equipment providing company in India surged nearly 4 percent on BSE to Rs. 84.5 on Friday.
In terms of return ratios, Lloyds Engineering Works Limited has reported a return on equity (ROE) of 26.5 percent, and a return on capital employed (ROCE) of 28.6 percent. Additionally, the company’s debt-to-equity ratio stands at 0.18.
The company’s revenue from operations stood at Rs. 135 crores in Q1 FY25, rising by nearly 20 percent YoY from Rs. 113 crores in Q1 FY24, and the net profit grew by 61.5 percent to Rs. 21 crores from Rs. 13 crores, during the same period.
The stock has delivered multibagger returns of nearly 102 percent in the last one year, and around 87 percent of positive returns year-to-date.
Incorporated in 1994, Lloyds Engineering Works Limited, formerly known as Lloyds Steels Industries Limited, is principally engaged in the design, engineering, manufacturing, fabrication, supply, erection and commissioning of all types of mechanical, hydraulic, structural, process plants, metallurgical, chemical plants equipment, and execution of turnkey and EPC projects.
Suzlon Energy Limited
With a market cap of Rs. 1.1 lakh crores, the shares of one of the leading renewable energy solutions providers in the world surged nearly 1.2 percent on BSE to Rs. 82.76 on Friday.
In terms of return ratios, Suzlon Energy Limited has reported a return on equity (ROE) of 28.8 percent, and a return on capital employed (ROCE) of 24.9 percent. Additionally, the company’s debt-to-equity ratio stands at 0.04.
The company’s revenue from operations stood at Rs. 2,022 crores in Q1 FY25, rising by nearly 50 percent YoY from Rs. 1,351 crores in Q1 FY24, and the net profit grew by 199 percent to Rs. 302 crores from Rs. 101 crores, during the same period.
The stock has delivered multibagger returns of nearly 215 percent in the last one year, as well as around 112.6 percent returns year-to-date.
Suzlon Energy Limited is primarily engaged in the business of manufacturing, project execution and operation and maintenance service (OMS) of Wind Turbine Generators (WTGs) and the sale of related components of various capacities.
Written by Shivani Singh
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