Investors often see companies with Return on Capital Employed (ROCE) and Return on Equity (ROE) above 20 percent as indicators of strong financial efficiency and good returns over time. When these high-performing companies also have a Price-to-Earnings (PE) ratio below the industry average, they may be considered undervalued, offering potential for capital appreciation in the long run.
This combination suggests the company is not only generating superior returns but also trading at a relatively attractive valuation, making it an appealing option for value and growth investment options
1. Hindustan Unilever Ltd:
Hindustan Unilever Ltd (HUL) is one of India’s largest and most trusted fast-moving consumer goods (FMCG) companies, headquartered in Mumbai and a subsidiary of the global giant Unilever. With a diverse portfolio of over 50 brands spanning personal care, home care, food, and beverages, HUL reaches millions of households across India. Known for iconic names like Dove, Surf Excel, Lipton, and Knorr, the company is also a leader in sustainability and corporate social responsibility.
- Market captilisation: Rs 5,54,103 Crs
- Industry PE: 56.3
- Stock PE: 53.3
- ROCE: 27.8 percent
- ROE: 20.7 percent
2. ITC Limited:
ITC Ltd is a diversified Indian conglomerate headquartered in Kolkata, with a strong presence across industries such as FMCG, hotels, paperboards and packaging, agribusiness, and IT. Originally known for its dominance in the tobacco sector, ITC has successfully expanded into non-cigarette FMCG segments with popular brands like Aashirvaad, Sunfeast, Bingo!, Yippee!, and Fiama.
- Market captilisation: Rs 5,45,991 Crs
- Industry PE: 32.2
- Stock PE: 27.5
- ROCE: 37.0 percent
- ROE: 27.5 percent
3. HCL Technologies Ltd:
HCL Technologies Ltd (HCLTech) is a leading global IT services company that offers a comprehensive range of services, including digital transformation, cloud computing, AI, engineering, and software solutions. The company operates through three primary business segments: IT and Business Services (ITBS), Engineering and R&D Services (ERS), and HCLSoftware. Notable products under HCL Software include HCL AppScan, HCL BigFix, and HCL Commerce Cloud.
- Market captilisation: Rs 4,47,020 Crs
- Industry PE: 30.0
- Stock PE: 25.7
- ROCE: 31.9 percent
- ROE: 25.2 percent
4. Petronet LNG Ltd
Petronet LNG Ltd is a leading Indian company specializing in the import, storage, and regasification of liquefied natural gas (LNG). Established in 1998, it plays a key role in India’s energy sector by ensuring the supply of clean and efficient fuel to meet the country’s growing demand. The company operates major LNG terminals and collaborates with global suppliers to support India’s energy security and environmental goals.
- Market captilisation: Rs 47,910 Crs
- Industry PE: 16.7
- Stock PE: 12.0
- ROCE: 25.6 percent
- ROE: 21.3 percent
5. Authum Investment & Infrastructure Ltd:
Authum Investment & Infrastructure Ltd is a diversified Indian financial services company, incorporated in 1982. Initially focused on investments in shares and securities, the company has evolved into a registered Non-Banking Financial Company (NBFC) offering a range of financial products and services.
- Market captilisation: Rs 37,684 Crs
- Industry PE: 21.6
- Stock PE: 8.96
- ROCE: 31.2 percent
- ROE: 34.1percent
Written By Likesh Babu S
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