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Returns On Capital Are A Standout For Shaily Engineering Plastics (NSE:SHAILY)

Simply Wall St · 3d ago

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So when we looked at the ROCE trend of Shaily Engineering Plastics (NSE:SHAILY) we really liked what we saw.

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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. To calculate this metric for Shaily Engineering Plastics, this is the formula:

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

0.29 = ₹2.0b ÷ (₹11b - ₹3.6b) (Based on the trailing twelve months to September 2025).

Therefore, Shaily Engineering Plastics has an ROCE of 29%. In absolute terms that's a great return and it's even better than the Machinery industry average of 15%.

See our latest analysis for Shaily Engineering Plastics

roce
NSEI:SHAILY Return on Capital Employed January 2nd 2026

Above you can see how the current ROCE for Shaily Engineering Plastics compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Shaily Engineering Plastics for free.

How Are Returns Trending?

The trends we've noticed at Shaily Engineering Plastics are quite reassuring. The data shows that returns on capital have increased substantially over the last five years to 29%. Basically the business is earning more per dollar of capital invested and in addition to that, 166% more capital is being employed now too. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

In Conclusion...

All in all, it's terrific to see that Shaily Engineering Plastics is reaping the rewards from prior investments and is growing its capital base. And a remarkable 612% total return over the last three years tells us that investors are expecting more good things to come in the future. 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.

Before jumping to any conclusions though, we need to know what value we're getting for the current share price. That's where you can check out our FREE intrinsic value estimation for SHAILY that compares the share price and estimated value.

If you want to search for more stocks that have been earning high returns, check out this free list of stocks with solid balance sheets that are also earning high returns on equity.