Return on capital employed (ROCE) is a financial ratio that can be used to evaluate the profitability and capital efficiency of an organization. In other words, this ratio can be used to determine how effectively a business is turning a profit from the capital it uses.
When evaluating a company for investment, financial managers, stakeholders, and potential investors may use a number of profitability ratios, including ROCE which is one of the most important metrics.
Multibagger stocks are those that have returned 100% or more in a specific time period. Meaning, if you invested Rs. 1 lakh into a multibagger it would return 2 lakh or more within that specified time period.
Here are 3 stocks that have some of the highest ROCE over a 3 year average up to 62% and have delivered multibagger returns during the same period:
RattanIndia Enterprises Ltd:
Shares of RattanIndia closed at Rs. 56.83, down 0.6% from Rs. 57.15 at closing on Thursday. The company has a market cap of Rs. 7,855 crore and 17% away from its 52 week high. The stock’s volumes on Friday were over 0.8x the weekly average volumes.
Rattan India Enterprises Limited engages in a broad range of commercial activities, including the provision of skilled, semi-skilled, and unskilled labor, software designing and development, design development, implementation of payment systems and gateways, and human resources and consulting.
The company has returned 921.43% in the last 3 years and 22.09% in the last one year period. The company also has a 3 year average ROCE of 61.64%.
Tanla Platforms Ltd:
Shares of Tanla closed at Rs. 1040.90, down 1.3% from Rs. 1054.95 at closing on Thursday. The company has a market cap of Rs. 13,993 crore and 21% away from its 52 week high. The stock’s volumes on Friday were over 0.6x the weekly average volumes.
A cloud communications service provider, Tanla Platforms Ltd (previously Tanla Solutions Ltd), enables companies to communicate with their clients and target audiences. Its main office is in Hyderabad, India. It is a provider of an international A2P (application to person) messaging platform.
The company has returned 281.66% in the last 3 years and 34.06% in the last one year period. The company also has a 3 year average ROCE of 56.28%.
Sonata Software Ltd:
Shares of Sonata closed at Rs. 1057.80, down 2.7% from Rs. 1086.95 at closing on Thursday. The company has a market cap of Rs. 14,832 crore and 8% away from its 52 week high. The stock’s volumes on Friday were over 0.7x the weekly average volumes.
IT company Sonata Software was established in 1986. North America, the Asia-Pacific, and Europe are their three main operating regions. Technology behemoths like Microsoft, Google, and Amazon are among the company’s clients.
The main areas of business for Sonata Software, as we mentioned before, are retail, digital transformation (ISVs), customer experience, agri commodities, and services. The company’s estimation of the growth of these industries in the future causes them to focus more on innovation and technology advancements within these key sectors.
The company has returned 359.06% in the last 3 years and 110.98% in the last one year period. The company also has a 3 year average ROCE of 44.21%.
Written by Sandeep R
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