Tag
#fundamentals
11 articles
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Can a 3% Margin Business Earn 20% ROCE? Here’s the math
Yes. A 3% margin can produce roughly 20% ROCE when each rupee of average capital employed generates about ₹6.70 of annual income. Here is the arithmetic.
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P/E Below 20 Worked for Me. Until It Didn’t.
Five FY26 IT companies all traded below 20 times earnings, yet their growth, returns on capital and cash conversion were very different. The threshold was only the first question.
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The 1x P/E Illusion: When One-Time Profit Distorts Valuation
A very low P/E can be an accounting snapshot, not a recurring valuation. Separate ongoing earnings from exceptional and discontinued gains first.
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Profit Positive, Cash Negative: Five FY26 Cases Worth Investigating
Positive profit with negative operating cash flow is a forensic signal, not a verdict. Five FY26 cases show the questions it should trigger.
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When Profit Outruns Sales: Four Checks Before You Celebrate
Profit growing faster than sales can signal better economics or a temporary lift. Check the top line, margin bridge, cash and comparison base.
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Why a Cheap Stock Can Stay Cheap: Understanding Value Traps
A value trap is a stock that looks cheap on a low multiple but stays cheap because the business underneath is deteriorating. Low price and cheap are not the same thing.
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How India's Biggest Companies Make Money: Business Models Explained
A running guide to how India's largest listed companies actually earn. The revenue drivers, cost structures, and economics behind banks, IT, FMCG, autos, retail, and more, in plain language.
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How to Read a Cash Flow Statement
A plain guide to the cash flow statement: the three sections, how profit reconciles to operating cash, and how to reach free cash flow.
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How to Read an Annual Report in 30 Minutes: What Actually Matters
Skip the glossy front pages. Start with the auditor's report and cash flows, then check related-party dealings and contingent liabilities for what the headline numbers hide.
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What Is ROCE? Return on Capital Employed, Explained with Indian Examples
ROCE measures how efficiently a business turns the capital it uses into operating profit. It is EBIT divided by capital employed, and higher, steadier is better.
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Return on Equity (ROE) Explained: Why a High Number Can Mislead
ROE is net profit divided by shareholders equity. It shows profit earned on owners money, but a high figure can hide debt rather than signal a better business.
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