High ROCE and ROE can indicate that a company is generating strong returns from the capital invested in its business and the shareholders’ funds. However, these metrics need to be viewed alongside valuations, debt, earnings growth and the sustainability of returns.
These companies differ significantly in their business models and growth drivers, so a high return ratio alone does not necessarily indicate similar investment characteristics. Investors may also consider factors such as revenue growth, profit margins, cash flows and future expansion plans before evaluating these stocks.
Among stocks trading below Rs. 300, a few companies currently report both ROCE and ROE above 40%. The list includes businesses from cruise tourism, lubricants, solar manufacturing, education services and jewellery, offering exposure to different sectors with strong return ratios.
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Waterways Leisure Tourism Limited
Waterways Leisure Tourism works in the segment of cruise tourism through its brand Cordelia Cruises. The company provides cruises in India with entertainment, food services, and other activities for leisure travelers and MICE (meetings, incentives, conferences and exhibitions), as well as weddings.
With a market capitalisation of Rs. 7,333 cr, the shares of Waterways Leisure Tourism Limited were trading at Rs. 101.30 per share, down from its previous close of Rs. 102.65 per share. The company has a strong return profile, with ROCE of 64.0% and ROE of 92.3%.
Castrol India Ltd
Castrol India is a lubricant manufacturer in the automotive and industrial segments. Its product line comprises engine oils, automotive lubricants, and industrial lubricants distributed via extensive distribution channels across India. The company is one of the businesses of the Castrol group that belongs to BP.
With a market capitalisation of Rs. 19,678 cr, the shares of Castrol India Ltd were trading at Rs. 198.95 per share, down from its previous close of Rs. 200.35 per share. The company reported a strong ROCE of 60.3% and ROE of 45.9%.
Websol Energy System Ltd
Websol Energy System is a producer of solar cells and solar modules. It produces solar cells and modules at its plant located in Falta, West Bengal. The company specialises in the manufacturing of photovoltaic cells and modules and has operated in the solar manufacturing industry.
With a market capitalisation of Rs. 3,033 cr, the shares of Websol Energy System Ltd were trading at Rs. 69.86 per share, down from its previous close of Rs. 70.48 per share. The company has a strong ROCE of 63.2% and ROE of 66.9%.
Crizac Ltd
Crizac is an educational platform connecting higher-education institutions with international recruiters of students. The company facilitates recruiting students from overseas markets for universities and institutions. The company’s operation focuses on such countries as the UK, Canada, Ireland, Australia, and New Zealand.
With a market capitalisation of Rs. 2,951 cr, the shares of Crizac Ltd were trading at Rs. 168.65 per share, down from its previous close of Rs. 170.30 per share. The company has a strong ROCE of 52.3% and ROE of 40.3%.
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Deepa Jewellers Ltd
Deepa Jewellers acts as a B2B designer, manufacturer, and supplier of gold jewellery, rather than being an actual jewellery chain store. The company manufactures hallmarked gold and diamond jewellery and sells them to jewellery chains and independent jewellery stores mostly in South India.
With a market capitalisation of Rs. 1,878 cr, the shares of Deepa Jewellers Ltd were trading at Rs. 195.60 per share, up from its previous close of Rs. 195.50 per share. The company has a strong ROCE of 51.6% and ROE of 56.4%.