February 2025 watchlist ideas: 2 high profit kings of capital efficiency

By Suhel Khan

Return on Capital Employed (ROCE) is an important metric that investors must take into consideration when evaluating a company’s performance.

Now, please do not confuse the ROCE with growth.

Also Read Stocks To Watch: ITC Hotels, Indian Oil Corp, JSW Energy, Colgate Palmolive, Hindustan Zinc, Suzlon Energy, Bajaj Auto What price will ITC Hotels list at? Here’s what analysts predict Rakesh Jhunjhunwala’s protege makes big contrarian bets Stock in Focus: ICICI Prudential, Power Grid, NESCO, IndiGo, Bajaj Finserv, Coal India, Infosys, Ashoka Buildcon, Bharti Airtel, Vodafone Idea

Growth refers to a company’s ability to increase its revenue and earnings over time. This can be achieved through ways like market expansion, new product launches, and acquisitions. While growth is seen as a positive sign, growth can sometimes come at the expense of profitability. Even long-term profitability.

ROCE on the other hand measures a company’s efficiency in generating profits from its invested capital. It is calculated by dividing operating profit by total capital employed. A high ROCE indicates that a company is effectively utilizing its resources to generate returns for its shareholders.

Also ReadTwo defensive stocks set for Bullish Reversal

Effective capital allocation is especially important when it comes ROCE. While growth is expected, the market give emphasis on the importance of sustainable growth. Blindly pursuing growth without considering ROCE could lead to a lower valuation and therefore a lower market value. True value creation lies in achieving growth that is both efficient and sustainable.

To explain it simply, if a company spends Rs 100 as capital expenditure, the money it makes on it is determines the ROCE percentage.

If it spends Rs 100 and makes 90 on it, the ROCE will be 90%.

Here are 3 companies that could be called “Kings of Capital Efficiency” you can consider adding to your watch list.

Ksolves India Ltd

Ksolves is a 360-degree software solution provider, known in the industry for its expertise in Big Data (Apache Kafka, Apache NiFi, Apache Spark, Apache Cassandra), Data Science (Artificial Intelligence & Machine Learning), Salesforce, DevOps, Java & Microservices, OpenShift, Penetration Testing etc.

With a market cap of Rs 1,114 cr, Ksolves focusses on Data Sciences/Big Data/Al &

 » Read More

Related Articles

Rupee fall hurts India Inc hard

The rupee inched closer to the 88-mark against the US dollar on Monday, putting companies in import-sensitive sectors on the edge. While firms fear a surge in imported inflation on account of rupee depreciation, consumer electronics companies, for instance, are taking price hikes to protect margins. In sectors such as thermal power, where the cost

Bata India Q3 profit grows marginally to Rs 58.6 crore on weak demand

Footwear major Bata India on Monday reported a marginal 1% growth in its net profit at Rs 58.6 crore during the October-December quarter, as compared to Rs 57.9 crore in the same quarter in 2023-24. Bloomberg consensus estimates had pegged the net profit during the quarter at Rs 72 crore.  The company’s revenue from operations

NFRA must separate audit review and disciplinary roles: Experts

Even the National Financial Reporting Authority (NFRA) weighs its options after the Delhi High Court’s order quashing the show-cause notices issued by the regulator against the IL&FS and DHFL auditors, legal experts argue that the regulator would need to create separate divisions for the twin functions of audit review and disciplinary action to comply with

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

0FansLike
0FollowersFollow
0SubscribersSubscribe
- Advertisement -

Latest Articles

Rupee fall hurts India Inc hard

The rupee inched closer to the 88-mark against the US dollar on Monday, putting companies in import-sensitive sectors on the edge. While firms fear a surge in imported inflation on account of rupee depreciation, consumer electronics companies, for instance, are taking price hikes to protect margins. In sectors such as thermal power, where the cost

Bata India Q3 profit grows marginally to Rs 58.6 crore on weak demand

Footwear major Bata India on Monday reported a marginal 1% growth in its net profit at Rs 58.6 crore during the October-December quarter, as compared to Rs 57.9 crore in the same quarter in 2023-24. Bloomberg consensus estimates had pegged the net profit during the quarter at Rs 72 crore.  The company’s revenue from operations

NFRA must separate audit review and disciplinary roles: Experts

Even the National Financial Reporting Authority (NFRA) weighs its options after the Delhi High Court’s order quashing the show-cause notices issued by the regulator against the IL&FS and DHFL auditors, legal experts argue that the regulator would need to create separate divisions for the twin functions of audit review and disciplinary action to comply with

Reliance makes sports drinks foray with Spinner

Reliance Consumer Products on Monday entered the sports hydration drink segment with Spinner. The drink, which is being offered at Rs 10 for a 150 ml bottle, has been co-created with former Sri Lankan cricketer Muttiah Muralitharan. Reliance has disrupted the beverages market with aggressive pricing of Campa Cola, which it relaunched in 2023.  ALSO

Supertails banks on services to counter q-comm disruption in pet care

Bengaluru-based pet care startup Supertails is betting big on services like veterinary care and grooming to set itself apart from quick commerce majors like Zepto, Blinkit, and Instamart, which are aggressively expanding their pet supply offerings. Backed by Fireside Ventures, the startup plans to launch offline centres in select cities that will function as both