Shelter Pharma (BOM:543963) ROC % : 19.85% (As of Mar. 2024)

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What is Shelter Pharma 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 %. Shelter Pharma's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 19.85%.

As of today (2024-06-13), Shelter Pharma's WACC % is 13.00%. Shelter Pharma's ROC % is 22.54% (calculated using TTM income statement data). Shelter Pharma generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Shelter Pharma ROC % Historical Data

The historical data trend for Shelter Pharma'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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Shelter Pharma ROC % Chart

Shelter Pharma Annual Data

Trend

Mar21

Mar22

Mar23

Mar24

ROC %

0.61

19.29

35.70

23.64

Shelter Pharma Semi-Annual Data
	Mar21	Mar22	Sep22	Mar23	Sep23	Mar24
ROC %	Get a 7-Day Free Trial			-	44.13	30.61	24.71	19.85

Shelter Pharma ROC % Calculation

Shelter Pharma'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 )
=	83.224 * ( 1 - 25.14% )	/	( (205.43	+	321.611)	/ 2 )
=	62.3014864	/	263.5205
=	23.64 %

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	))
=	214.49	-	4.775	-	( 4.285	-	max(0, 62.865	-	187.166	+	4.285	))
=	205.43

	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	))
=	379.148	-	7.14	-	( 50.397	-	max(0, 14.749	-	297.187	+	50.397	))
=	321.611

Shelter Pharma'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: Sep. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	83.144 * ( 1 - 25.56% )	/	( (302.068	+	321.611)	/ 2 )
=	61.8923936	/	311.8395
=	19.85 %

where

	Invested Capital		(Q: Sep. 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	))
=	345.681	-	2.347	-	( 41.266	-	max(0, 18.195	-	318.737	+	41.266	))
=	302.068

	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	))
=	379.148	-	7.14	-	( 50.397	-	max(0, 14.749	-	297.187	+	50.397	))
=	321.611

Note: The Operating Income data used here is two times the semi-annual (Mar. 2024) data.

Shelter Pharma (BOM:543963) 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, Shelter Pharma's WACC % is 13.00%. Shelter Pharma's ROC % is 22.54% (calculated using TTM income statement data). Shelter Pharma generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Shelter Pharma ROC % Related Terms

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Shelter Pharma (BOM:543963) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Drug Manufacturers » Shelter Pharma Ltd (BOM:543963) » Definitions » ROC %

Traded in Other Exchanges

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Address

Mistry Chambers, Khanpur, Ahmedabad, GJ, IND, 380001

Website

https://www.shelter.co.in

Shelter Pharma Ltd focuses in manufacturing herbal products with well-built presence in Human Pharma as well as Veterinary space. It is present in most of non-critical segment of Human as well as Veterinary Pharma through its well spread portfolio. Its products include Tablets, syrups, Baby drops, Barley Water, Oils, Powders, Ointments and Etc.

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