RailTel of India (BOM:543265) ROC % : 12.07% (As of Mar. 2024)

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What is RailTel of India ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. RailTel of India's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 12.07%.

As of today (2024-06-08), RailTel of India's WACC % is 12.01%. RailTel of India's ROC % is 8.67% (calculated using TTM income statement data). RailTel of India earns returns that do not match up to its cost of capital. It will destroy value as it grows.

RailTel of India ROC % Historical Data

The historical data trend for RailTel of India's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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RailTel of India ROC % Chart

RailTel of India Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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10.02

9.03

12.73

9.39

9.87

RailTel of India Quarterly Data
	Mar16	Mar17	Mar18	Mar19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															5.61	15.48	11.28	9.92	12.07

RailTel of India ROC % Calculation

RailTel of India's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	3061.7 * ( 1 - 24.96% )	/	( (18081.9	+	28487.5)	/ 2 )
=	2297.49968	/	23284.7
=	9.87 %

where

	Invested Capital		(A: Mar. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	33391.4	-	10437.2	-	( 4872.3	-	max(0, 15124.4	-	20958.1	+	4872.3	))
=	18081.9

	Invested Capital		(A: Mar. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	40495.8	-	7705.2	-	( 9772	-	max(0, 20938.5	-	25241.6	+	9772	))
=	28487.5

RailTel of India's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	4522.4 * ( 1 - 23.94% )	/	( (0	+	28487.5)	/ 1 )
=	3439.73744	/	28487.5
=	12.07 %

where

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

	Invested Capital		(Q: Mar. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	40495.8	-	7705.2	-	( 9772	-	max(0, 20938.5	-	25241.6	+	9772	))
=	28487.5

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

RailTel of India (BOM:543265) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, RailTel of India's WACC % is 12.01%. RailTel of India's ROC % is 8.67% (calculated using TTM income statement data). RailTel of India earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

RailTel of India ROC % Related Terms

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RailTel of India (BOM:543265) Business Description

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RAILTEL:India

Address

Tower-2, East Kidwai Nagar, Plate - A, 6th Floor, Office Block, South Delhi, New Delhi, IND, 110023

Website

https://www.railtelindia.com

RailTel Corporation of India Ltd is a neutral telecom infrastructure provider in the country. It owns a pan-India optic fiber network on an exclusive Right of Way along the Railway track. The company's operating segment includes Telecom Services and Project Work services. It generates maximum revenue from the Telecom Services segment. The telecom services segment of the company provides services such as Managed Data Services; Leased Lines; Virtual Private Networks; Internet Leased Lines; Data Centre; Tower collocation and others; and the project work services involve the following projects; National Optical Fiber Networks, Telecom and IT services related projects, and Enterprise specific IT & ITES Projects.

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