Deem Roll Tech (NSE:DEEM) ROC % : 11.16% (As of Mar. 2024)

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What is Deem Roll Tech 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 %. Deem Roll Tech's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 11.16%.

As of today (2024-12-13), Deem Roll Tech's WACC % is 11.74%. Deem Roll Tech's ROC % is 11.48% (calculated using TTM income statement data). Deem Roll Tech earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Deem Roll Tech ROC % Historical Data

The historical data trend for Deem Roll Tech'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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Deem Roll Tech ROC % Chart

Deem Roll Tech Annual Data

Trend

Mar21

Mar22

Mar23

Mar24

ROC %

6.84

8.88

11.71

11.35

Deem Roll Tech Semi-Annual Data
	Mar21	Mar22	Mar23	Sep23	Mar24
ROC %	-	-	-	12.00	11.16

Deem Roll Tech ROC % Calculation

Deem Roll Tech'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 )
=	121.693 * ( 1 - 20.92% )	/	( (762.901	+	932.407)	/ 2 )
=	96.2348244	/	847.654
=	11.35 %

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	))
=	935.934	-	136.763	-	( 36.27	-	max(0, 392.676	-	570.774	+	36.27	))
=	762.901

	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	))
=	1340.862	-	167.633	-	( 240.822	-	max(0, 436.619	-	977.715	+	240.822	))
=	932.407

Deem Roll Tech'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 )
=	125.176 * ( 1 - 21.97% )	/	( (818.732	+	932.407)	/ 2 )
=	97.6748328	/	875.5695
=	11.16 %

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	))
=	982.585	-	143.187	-	( 20.666	-	max(0, 409.597	-	640.321	+	20.666	))
=	818.732

	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	))
=	1340.862	-	167.633	-	( 240.822	-	max(0, 436.619	-	977.715	+	240.822	))
=	932.407

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

Deem Roll Tech (NSE:DEEM) 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, Deem Roll Tech's WACC % is 11.74%. Deem Roll Tech's ROC % is 11.48% (calculated using TTM income statement data). Deem Roll Tech 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.

Deem Roll Tech ROC % Related Terms

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Deem Roll Tech Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Deem Roll Tech Ltd (NSE:DEEM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

C-3/301, S.G. Highway, Anushruti Apartment, Nr. Jain Mandir, Opp New York Tower, Ahmedabad, GJ, IND, 380054

Website

https://www.deemrolls.com

Deem Roll Tech Ltd is a manufacturers of high-quality steel and alloy Rolls in India. The company comprises three fully integrated factories with machine shops, foundries and heat treatment plants. The company's products include S.G Iron or Ductile Iron Roll, Indefinite Chill Alloy Cast Iron, Alloy Steel Base, Double Poured Alloy Indefinite Chil, HSS Rolls, Spheroidal Graphite Iron Rolls, etc. The company generates the majority of its revenue from sales in Gujarat, followed by Kolkata.

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