A company’s return on equity (ROE) is a gauge of a corporation’s profitability and how efficient it is in generating profits during a given period of time. A high ROE indicates that the company is good at converting its equity financing into profits. Ideally, the ROE should be above 15 percent to 20 percent, depending on the industry of a particular company:
Here are a few multibagger small-cap stocks with a high return on equity:
Apar Industries
The company is a market leader in India with a global presence. It has three broad business segments, which are conductors, transformer and speciality oils (TSO), and power/telecom cables.
Apar Industries’ shares settled at ₹ 3,660.00 apiece on Friday. In the past year, its share price escalated by 204.51 percent to deliver multibagger returns. With a market capitalization of ₹ 13,988 crores, Apar Industries is a small-cap company. It has a high return on equity of 32.28 percent.
Safari Industries
Safari Industries is in the business of manufacturing and trading luggage and luggage accessories.
The company’s shares closed at ₹ 2,902.50 apiece on Friday. In the past year, its share price escalated by 147.40 percent to deliver multibagger returns. With a market capitalization of ₹ 6,874 crores, Safari Industries is a small-cap company. It has a high return on equity of 34.43 percent.
Ion Exchange (India)
Ion Exchange (India) is engaged in a wide range of solutions across the water cycle from pre-treatment to process water treatment, waste water treatment, recycling, zero liquid discharge, sewage treatment, packaged drinking water, and sea water desalination.
The company’s shares closed at ₹ 496.55 apiece on Friday. In the past year, its share price escalated by 176.00 percent to deliver multibagger returns. With a market capitalization of ₹ 6,347 crores, Ion Exchange is a small-cap company. It has a high return on equity of 26.42 percent.
Written by Simran Bafna
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