Shivam Chemicals (BOM:544165) ROC % : 4.37% (As of Sep. 2024)

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What is Shivam Chemicals 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 %. Shivam Chemicals's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 4.37%.

As of today (2025-03-26), Shivam Chemicals's WACC % is 11.62%. Shivam Chemicals's ROC % is 4.91% (calculated using TTM income statement data). Shivam Chemicals earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shivam Chemicals ROC % Historical Data

The historical data trend for Shivam Chemicals'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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Shivam Chemicals ROC % Chart

Shivam Chemicals Annual Data

Trend

Mar21

Mar22

Mar23

Mar24

ROC %

16.90

37.15

16.15

4.69

Shivam Chemicals Quarterly Data
	Mar21	Mar22	Mar23	Sep23	Dec23	Mar24	Sep24
ROC %	Get a 7-Day Free Trial			-	-0.16	12.00	5.65	4.37

Shivam Chemicals ROC % Calculation

Shivam Chemicals'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 )
=	24.352 * ( 1 - 40.9% )	/	( (283.765	+	330.114)	/ 2 )
=	14.392032	/	306.9395
=	4.69 %

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	))
=	312.395	-	25.146	-	( 3.484	-	max(0, 105.517	-	166.322	+	3.484	))
=	283.765

	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	))
=	409.626	-	75.947	-	( 3.565	-	max(0, 206.608	-	251.859	+	3.565	))
=	330.114

Shivam Chemicals's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	27.064 * ( 1 - 33.9% )	/	( (330.114	+	488.074)	/ 2 )
=	17.889304	/	409.094
=	4.37 %

where

	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	))
=	409.626	-	75.947	-	( 3.565	-	max(0, 206.608	-	251.859	+	3.565	))
=	330.114

	Invested Capital		(Q: Sep. 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	))
=	569.676	-	24.027	-	( 57.575	-	max(0, 184.086	-	414.11	+	57.575	))
=	488.074

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

Shivam Chemicals (BOM:544165) 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, Shivam Chemicals's WACC % is 11.62%. Shivam Chemicals's ROC % is 4.91% (calculated using TTM income statement data). Shivam Chemicals 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.

Shivam Chemicals ROC % Related Terms

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Shivam Chemicals Business Description

Industry

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Traded in Other Exchanges

N/A

Address

N.S.Phadke Marg, Office No. 108, 1st Floor, Hubtown Solaris, Saiwadi, Andheri (E), Mumbai, MH, IND, 400069

Website

https://www.shivamchem.com

Shivam Chemicals Ltd is a manufacturer of Hydrated Lime (Calcium Hydroxide) & a distributor. Its products include Poultry feed supplement (MBM), Di-Calcium Phosphate (Feed Grade), Magnesium Oxide, Limestone Powder, etc.

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