In this blog, we will look at Top 10 High Return on Equity Stocks that have consistently provided return in last many years.

What are Consistent Compounders

Consistent compounders are the stocks which mostly outperformed the market in a consistent way rather than a one time show.

In short, the stocks which have provided an excellent share price CAGR better than the index historically.

The companies with a good historical Return on equity, Return on capital employed, Sales growth, stock price performance and most probably turning the profits into its cash books are most likely the consistent compounders.

Criteria:

  • 5Y Avg. RoE – The stocks with more than 15% of Average Return on Equity for the past 5 years.
  • ROCE – The stocks with more than 15% of Return on Capital Employed for the latest financial year.
  • 5Y Stock Price CAGR – The stocks with a stock price CAGR of more than 17% for the past 5 years.
  • CFO/EBITDA – The stocks with a cash-flow to EBITDA ratio of more than 1.

Top 10 High Return on Equity Stocks

  • Titan Company Ltd – Titan is the market leader in the organized jewellery retailing and watches segments. The company’s market leadership in these segments is driven by its strong brands, healthy store additions, association of trust with the Tata brand, and its pan-India distribution network.

  • DCM Shriram Ltd – The company is the second-largest domestic manufacturer of caustic soda, with capacity of 1,845 tons per day with plants in Kota, Rajasthan, and Bharuch, Gujarat. Sustained price realization, lower power costs and large-scale operations ensured healthy operating margin over the past decade.

  • APL Apollo Tubes Ltd – It is one of India’s leading branded steel products manufacturers. Headquartered at Delhi NCR, the Company runs 10 manufacturing facilities churning out over 1,500 varieties of MS Black Pipes, Galvanized Tubes, Pre-Galvanized Tubes, Structural ERW Steel Tubes and Hollow Sections.

  • Zensar Technologies Ltd – Zensar Technologies is a leading digital solutions and technology services company. It is a part of the Mumbai based RPG group and is headquartered in Pune, India. It operates in two segments: Application Management Service and Infrastructure management service.

  • Page Industries Ltd – JOCKEY is the company’s flagship brand and a market leader in the inner-wear category. Page Industries and Brand Jockey have pioneered the inner-wear industry on many fronts. The company has established the premium segment in the inner-wear category in India through brand Jockey.

  • Ratnamani Metals and Tubes Ltd – The company is one of the largest players in the SSTP segment in India and has steadily enhanced stainless steel capacity to 61,500 (from 31,500) tonne per annum (tpa). Strong technological competitiveness has led to above industry-average profitability over the years.

  • Marico Ltd – Marico Limited is one of India’s leading consumer goods companies operating in global beauty and wellness categories. It is present in over 25 countries across emerging markets of Asia and Africa. It nurtures leading brands across categories of hair care, skin care, edible oils, healthy foods, male grooming and fabric care.

  • Cyient Ltd. – Cyient is engaged in providing global technology services and solutions. It specializes in geospatial, engineering design, analytics, network and operations solutions. Cyient’s niche offerings and strong client relationship have driven a healthy revenue growth over the last five years.

  • Bluestar Ltd – BSL has an established track record and strong market position in the EMP segment, where it is one of the two largest players along with Voltas Ltd. In the UP segment it is the largest player in commercial refrigeration business and has increased its market share in the room air conditioning business to 13% in fiscal 2021 from 10% five years back.

  • L&T Technology Services Ltd – L&T Tech. Services Ltd (LTTS) is a global leader in Engineering and R&D (ER&D) services. LTTS’ customer base includes 69 Fortune 500 companies and 53 of the world’s top ER&D companies.

These were the “Top 10 High Return on Equity Stocks“, please read our other article on “Top 10 Favorite Stocks to Mutual Funds“