WEBULL

There's Been No Shortage Of Growth Recently For Tainwala Chemicals and Plastics (India)'s (NSE:TAINWALCHM) Returns On Capital

Simply Wall St · 2d ago

There are a few key trends to look for if we want to identify the next multi-bagger. One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. With that in mind, we've noticed some promising trends at Tainwala Chemicals and Plastics (India) (NSE:TAINWALCHM) so let's look a bit deeper.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Understanding Return On Capital Employed (ROCE)

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Tainwala Chemicals and Plastics (India) is:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.0055 = ₹10m ÷ (₹1.9b - ₹9.9m) (Based on the trailing twelve months to September 2025).

Thus, Tainwala Chemicals and Plastics (India) has an ROCE of 0.5%. In absolute terms, that's a low return and it also under-performs the Chemicals industry average of 12%.

View our latest analysis for Tainwala Chemicals and Plastics (India)

roce
NSEI:TAINWALCHM Return on Capital Employed December 6th 2025

While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Tainwala Chemicals and Plastics (India) has performed in the past in other metrics, you can view this free graph of Tainwala Chemicals and Plastics (India)'s past earnings, revenue and cash flow.

What Does the ROCE Trend For Tainwala Chemicals and Plastics (India) Tell Us?

We're delighted to see that Tainwala Chemicals and Plastics (India) is reaping rewards from its investments and is now generating some pre-tax profits. About five years ago the company was generating losses but things have turned around because it's now earning 0.5% on its capital. And unsurprisingly, like most companies trying to break into the black, Tainwala Chemicals and Plastics (India) is utilizing 113% more capital than it was five years ago. This can tell us that the company has plenty of reinvestment opportunities that are able to generate higher returns.

Our Take On Tainwala Chemicals and Plastics (India)'s ROCE

In summary, it's great to see that Tainwala Chemicals and Plastics (India) has managed to break into profitability and is continuing to reinvest in its business. Since the stock has returned a staggering 135% to shareholders over the last five years, it looks like investors are recognizing these changes. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist.

Like most companies, Tainwala Chemicals and Plastics (India) does come with some risks, and we've found 3 warning signs that you should be aware of.

While Tainwala Chemicals and Plastics (India) may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.