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Declining Stock and Solid Fundamentals: Is The Market Wrong About Aprameya Engineering Limited (NSE:APRAMEYA)?

Simply Wall St · 6d ago

With its stock down 15% over the past month, it is easy to disregard Aprameya Engineering (NSE:APRAMEYA). However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Specifically, we decided to study Aprameya Engineering's ROE in this article.

ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.

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How Do You Calculate Return On Equity?

ROE can be calculated by using the formula:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Aprameya Engineering is:

35% = ₹246m ÷ ₹710m (Based on the trailing twelve months to September 2025).

The 'return' is the profit over the last twelve months. That means that for every ₹1 worth of shareholders' equity, the company generated ₹0.35 in profit.

View our latest analysis for Aprameya Engineering

What Has ROE Got To Do With Earnings Growth?

Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

Aprameya Engineering's Earnings Growth And 35% ROE

Firstly, we acknowledge that Aprameya Engineering has a significantly high ROE. Additionally, the company's ROE is higher compared to the industry average of 13% which is quite remarkable. So, the substantial 29% net income growth seen by Aprameya Engineering over the past five years isn't overly surprising.

We then performed a comparison between Aprameya Engineering's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 35% in the same 5-year period.

past-earnings-growth
NSEI:APRAMEYA Past Earnings Growth January 6th 2026

Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. Is Aprameya Engineering fairly valued compared to other companies? These 3 valuation measures might help you decide.

Is Aprameya Engineering Using Its Retained Earnings Effectively?

Aprameya Engineering doesn't pay any regular dividends to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above.

Conclusion

On the whole, we feel that Aprameya Engineering's performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Remember, the price of a stock is also dependent on the perceived risk. Therefore investors must keep themselves informed about the risks involved before investing in any company. To know the 4 risks we have identified for Aprameya Engineering visit our risks dashboard for free.