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High ROE Stocks in India

Return on Equity (ROE) is one of the most important financial ratios. It tells us how well the company has used its shareholder's money to make profits.

The ROE is calculated by dividing the current year's net profit with the average shareholder's equity for that period. The return on equity is very important in determining the fundamental strength of a company.

Marketcap: Largecap
(Latest, %)
(3 yrs, Avg. %)
(5 yrs, Avg. %)
(Rs m)
(Curr FY, x)
HINDUSTAN ZINC727.781.3%44.7%34.9%39.63,074,5530.9
LIFE INSURANCE CORPORATION1,037.877.3%52.2%134.5%18.56,564,0830.0
COAL INDIA494.749.1%41.4%48.4%9.53,048,3940.1
CG POWER & INDUSTRIAL633.544.6%36.2%21.7%111.1967,5910.0
ADANI POWER710.335.9%23.9%14.4%13.22,739,5841.4
VARUN BEVERAGES1,503.430.3%26.3%20.7%88.31,953,4930.7
L&T INFOTECH4,816.627.4%27.4%28.4%31.11,426,5000.0
BAJAJ FINSERV1,608.726.6%22.7%22.0%16.52,566,5834.6
ASIAN PAINTS2,893.526.3%24.6%24.9%51.22,775,3910.1
HINDUSTAN AERO.4,939.624.7%24.0%22.6%44.83,303,4480.0
TVS MOTORS2,168.123.8%18.8%19.8%56.51,030,0133.9
HCL TECHNOLOGIES1,351.722.8%21.1%21.9%23.33,667,9250.0
BAJAJ FINANCE6,819.421.4%16.6%17.3%29.34,227,7894.0
CUMMINS INDIA3,769.121.3%17.7%17.3%80.31,044,7950.1
BHARAT ELECTRONICS287.821.2%19.7%19.4%53.42,103,7540.0
ABB INDIA8,398.421.0%18.3%14.0%121.71,779,6910.0
BAJAJ AUTO8,912.020.7%19.7%20.9%33.52,488,0360.0

* We show NM where the values are negative

Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.

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Which are the best high ROE stocks in India?

As per Equitymaster's Stock Screener, these are the best high ROE stocks in India right now...

Please note, these companies are categorized by latest financial year's ROE. These companies also fare well if we take their 3-year or 5-year average ROE.

These are not recommendations...just a filtered list of stocks. To find the best ROE stocks to invest in, you need to dig deeper into each company and study their future prospects.

What does ROE stand for and what is the formula for calculating ROE?

ROE stands for return on equity. It is the net income from the firm's most recent income statement, divided by the total equity at the end of the period.

ROE = 100% * (net income / total equity)

To identify multibagger stocks with the help of ROE, check the ROE trend for the past five or seven years. It should show a consistent and increasing trend.

What is a good ROE for stocks in India?

The ROE (Return on Equity) is one of the most important criteria when filtering stocks to invest in.

ROE represents a firm's ability to generate returns for its shareholders. It tells us how much profit the firm generates for each rupee of equity it owns.

If a company has a low ROE, it means it has not used the capital invested by shareholders efficiently and vice versa.

While there's no set criteria, a company consistently reporting ROE of 15-20% or above is considered good.

It also depends on the specific industry the company is involved in because different companies have varying levels of assets and debt on their balance sheet.

Check out different screens on Equitymaster's Indian stock screener. This tool shortlists stocks which fare well on fundamentals as well as valuations. Here are some of the popular screens:

How to use Return on Equity (ROE) to identify multibagger stocks?

It's no secret that companies with high return ratios generate good returns for their shareholders.

To identify multibagger stocks with the help of ROE, check the ROE trend for the past five or seven years. It should show a consistent and increasing trend.

A steady and rising ROE is an indicator that management is giving shareholders more for their money.

Is ROE the most important ratio to identify stocks to buy?

Of all the ratios that investors look at, return ratios are important. Return ratios represent a company's ability to generate returns for its shareholders.

So, along with ROE, ROCE and ROA are equally important.

ROE, however, faces one drawback. A company that takes high levels of debt will show up a high ROE.

Hence it is advised to look at trends for all return ratios over a number of years and analyze each of its components. It will not only help you understand the company's profit and loss statement better, but also balance it against the overlooked left and right sides of the balance sheet.

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