ReNew Energy Global (STU:7JU) ROC % : 4.67% (As of Dec. 2023)

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What is ReNew Energy Global 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 %. ReNew Energy Global's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 4.67%.

As of today (2024-05-24), ReNew Energy Global's WACC % is 6.09%. ReNew Energy Global's ROC % is 4.24% (calculated using TTM income statement data). ReNew Energy Global earns returns that do not match up to its cost of capital. It will destroy value as it grows.

ReNew Energy Global ROC % Historical Data

The historical data trend for ReNew Energy Global'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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ReNew Energy Global ROC % Chart

ReNew Energy Global Annual Data

Trend

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

33.82

10.52

9.65

13.85

ReNew Energy Global Quarterly Data
	Mar19	Mar20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial											5.69	-0.17	5.59	7.65	4.67

ReNew Energy Global ROC % Calculation

ReNew Energy Global's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	508.119 * ( 1 - -103.6% )	/	( (6949.316	+	7989.633)	/ 2 )
=	1034.530284	/	7469.4745
=	13.85 %

where

	Invested Capital		(A: Mar. 2022 )
=	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	))
=	7643.293	-	289.575	-	( 944.687	-	max(0, 1207.006	-	1611.408	+	944.687	))
=	6949.316

	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	))
=	8475.204	-	554.361	-	( 879.362	-	max(0, 1316.148	-	1247.358	+	879.362	))
=	7989.633

ReNew Energy Global's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	453.18 * ( 1 - 1.17% )	/	( (9263.102	+	9930.902)	/ 2 )
=	447.877794	/	9597.002
=	4.67 %

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	))
=	9175.471	-	95.742	-	( 987.036	-	max(0, 1542.514	-	1359.141	+	987.036	))
=	9263.102

	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	))
=	9766.952	-	104.109	-	( 1264.54	-	max(0, 1812.158	-	1544.099	+	1264.54	))
=	9930.902

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

ReNew Energy Global (STU:7JU) 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, ReNew Energy Global's WACC % is 6.09%. ReNew Energy Global's ROC % is 4.24% (calculated using TTM income statement data). ReNew Energy Global 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.

ReNew Energy Global ROC % Related Terms

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ReNew Energy Global (STU:7JU) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » ReNew Energy Global PLC (STU:7JU) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

RNW:USA 7JU:Germany

Address

C/o Vistra (UK) Ltd., 4th Floor 11-12 St. James’ Square, London, GBR, SW1Y 4LB

Website

https://www.renewpower.in

ReNew Energy Global PLC is a Developer and operator of clean energy projects intended to meet India's growing energy needs in an efficient, sustainable and socially responsible manner. The Company provides end-to-end solutions in a just and inclusive manner in the areas of clean energy, value-added energy offerings through digitalization, storage, and carbon markets that increasingly are integral to addressing climate change.

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