Return on Capital Employed (ROCE) is a profitability ratio that shows the company’s ability to efficiently utilize its capital, including both debts and equity.
ROCE is determined by dividing earnings before interest and taxes (EBIT) by capital employed. In a ROCE calculation, capital employed refers to the total assets of the Company after all liabilities have been deducted.
A Higher ROCE ratio is better because it signifies the company’s ability to generate more profits on each rupee of capital invested. The ROCE is used to compare organizations in the same sector or industry. This is useful in determining which company spends its funds most efficiently in order to generate healthy returns.
Here are three Penny Stocks with ROCEs of up to 54%
Anmol India Ltd
Anmol India shares closed at Rs 41.97 per share, down 4.18 percent on Friday from the previous close price, and the company has a market capitalization of Rs 238 crores.
The company’s profitability ratios are in a strong position, with the return on capital employed at 30.20 percent, the return on equity at 23.58 percent, and the company’s net profit margin reported at 1.32 percent.
The company’s revenue has decreased by 14 percent year on year, from Rs 556 crore in Q1FY23 to Rs 480 crore in Q1FY24. During the same period, net profit jumped by 13 percent from Rs 8.13 crore to Rs 9.19 crore.
Anmol India Limited is a wholesale trader of several types of coal, including US coal, Indonesian coal, domestic coal, petroleum coke, and coking coal.
Rajnandini Metal Ltd
Rajnandini Metal shares closed at Rs 10.05 on Friday, a 0.50 percent decline from the previous close price, with a market capitalization of Rs 277 crores.
The company’s profitability ratios have been remarkable throughout the years, with the return on capital employed at 54 percent, the return on equity at 33.01 percent, and the company’s net profit margin increased from 0.97 percent to 1.32 percent.
The company’s revenue has increased by 2 percent year on year, from Rs 260 crore in Q1FY23 to Rs 265 crore in Q1FY24. During the same period, net profit jumped by 28 percent from Rs 3.59 crore to Rs 4.59 crore.
Rajnandini Metal Ltd is a company that manufactures, and deals with steel, iron, iron alloys, castings, different chemicals, furnace oils, and petroleum products.
SBC Exports Ltd.
SBC Exports Ltd has a market capitalization of Rs 457 crores. The company’s shares closed at Rs 21.60 per share, up 0.23 percent on Friday from the previous close price.
SBC Exports’ Profitability ratios are in a more favorable situation. The return on capital employed at 28.11 percent, the return on equity at 19.47 percent, and the company’s net profit margin has increased from 2.03 percent to 3.61 percent.
The company’s revenue has increased by 22 percent year on year, from Rs 40 crore in Q1FY23 to Rs 49 crore in Q1FY24. During the same period, net profit jumped by 96 percent from Rs 2.34 crore to Rs 4.58 crore.
SBC Exports Ltd is involved in the trading and manufacturing of garments, as well as manpower supply and tour operator services.
Written by Omkar Chitnis
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