WEBULL

DPI Holdings Berhad (KLSE:DPIH) Will Be Hoping To Turn Its Returns On Capital Around

Simply Wall St · 5d ago

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Although, when we looked at DPI Holdings Berhad (KLSE:DPIH), it didn't seem to tick all of these boxes.

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.

Return On Capital Employed (ROCE): What Is It?

Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on DPI Holdings Berhad is:

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

0.052 = RM5.1m ÷ (RM133m - RM34m) (Based on the trailing twelve months to August 2025).

Therefore, DPI Holdings Berhad has an ROCE of 5.2%. Ultimately, that's a low return and it under-performs the Chemicals industry average of 8.1%.

View our latest analysis for DPI Holdings Berhad

roce
KLSE:DPIH Return on Capital Employed January 7th 2026

Historical performance is a great place to start when researching a stock so above you can see the gauge for DPI Holdings Berhad's ROCE against it's prior returns. If you'd like to look at how DPI Holdings Berhad has performed in the past in other metrics, you can view this free graph of DPI Holdings Berhad's past earnings, revenue and cash flow.

How Are Returns Trending?

On the surface, the trend of ROCE at DPI Holdings Berhad doesn't inspire confidence. Over the last five years, returns on capital have decreased to 5.2% from 11% five years ago. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. If these investments prove successful, this can bode very well for long term stock performance.

On a side note, DPI Holdings Berhad's current liabilities have increased over the last five years to 26% of total assets, effectively distorting the ROCE to some degree. Without this increase, it's likely that ROCE would be even lower than 5.2%. Keep an eye on this ratio, because the business could encounter some new risks if this metric gets too high.

The Bottom Line

Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for DPI Holdings Berhad. These growth trends haven't led to growth returns though, since the stock has fallen 39% over the last five years. As a result, we'd recommend researching this stock further to uncover what other fundamentals of the business can show us.

If you want to know some of the risks facing DPI Holdings Berhad we've found 5 warning signs (2 shouldn't be ignored!) that you should be aware of before investing here.

If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.