Synopsis: Five profitable picks including Alkem Laboratories, Navin Fluorine, and others that stand out with high ROCE and operating profit margins (OPM), reflecting efficient capital allocation and strong operational performance.
High Return on Capital Employed (ROCE) and Operating Profit Margin (OPM) are two key indicators of a company’s financial strength, reflecting efficient capital allocation and strong operational performance. Companies that consistently score well on these metrics often demonstrate superior profitability and disciplined management.
Across sectors such as pharmaceuticals, specialty chemicals, FMCG, railway services, and defence, several companies have maintained healthy profitability while generating attractive returns on capital. Here are five stocks that stand out for their strong ROCE and OPM, making them worth keeping on investors’ radar.
Alkem Laboratories Ltd
Alkem Laboratories Ltd is one of India’s leading pharmaceutical companies engaged in the development, manufacturing, and marketing of branded generics, generic drugs, and active pharmaceutical ingredients (APIs). The company has a strong presence in domestic acute and chronic therapies while also exporting products to over 40 countries, with growing operations in the U.S. and other international markets.
With a market capitalisation of Rs. 67,147 cr, the shares of Alkem Laboratories Ltd closed at Rs. 5616 per share, down from its previous close of Rs. 5,664.75 per share. The company maintains healthy profitability with an ROCE of 21.2%, ROE of 18.9%, and an operating profit margin (OPM) of 20.4%.
Navin Fluorine International Ltd
Navin Fluorine International Ltd is one of the leading manufacturers of fluorochemicals, specialty chemicals, and contract development and manufacturing (CDMO) solutions. The company serves industries such as pharmaceuticals, agrochemicals, refrigeration, and advanced materials, with a strong focus on innovation, high-value products, and exports.
With a market capitalisation of Rs. 37,702 cr, the shares of Navin Fluorine International Ltd closed at Rs. 7350.50 per share, down from its previous close of Rs. 7,547.55 per share. The company has strong profitability metrics, with an ROCE of 21.4%, ROE of 20.3%, and an operating profit margin (OPM) of 32.6%.
Hindustan Unilever Ltd
Hindustan Unilever Ltd (HUL) is India’s largest fast-moving consumer goods (FMCG) company, offering a wide portfolio of products across home care, personal care, beauty, nutrition, and foods. Backed by a strong distribution network and a portfolio of well-known brands, the company enjoys a dominant position in the Indian consumer goods market.
With a market capitalisation of Rs. 5,01,837 cr, the shares of Hindustan Unilever Ltd closed at Rs. 2135.85 per share, down from its previous close of Rs. 2,210.05 per share. The company delivers robust financial performance, with an ROCE of 28.4%, ROE of 31.0%, and an operating profit margin (OPM) of 23.3%.
Indian Railway Catering and Tourism Corporation Ltd
Indian Railway Catering & Tourism Corporation Ltd (IRCTC) is a public sector enterprise under the Ministry of Railways and is the exclusive provider of online railway ticketing, catering, packaged drinking water, and tourism services for Indian Railways.
With a market capitalisation of Rs. 39,888 cr, the shares of Indian Railway Catering and Tourism Corporation Ltd closed at Rs. 498.60 per share, down from its previous close of Rs. 500.90 per share. The company boasts exceptional profitability, with an ROCE of 46.1%, ROE of 34.6%, and an operating profit margin (OPM) of 32.0%.
Hindustan Aeronautics Ltd
Hindustan Aeronautics Ltd (HAL) is India’s premier aerospace and defence company, engaged in the design, development, manufacture, repair, and maintenance of aircraft, helicopters, engines, avionics, and defence systems. As a key supplier to the Indian Armed Forces, the company plays a pivotal role in the country’s defence indigenisation and benefits from increasing government focus on domestic defence manufacturing.
With a market capitalisation of Rs. 2,91,853 cr, the shares of Hindustan Aeronautics Ltd closed at Rs. 4364 per share, down from its previous close of Rs. 4,399.95 per share. The company maintains strong profitability, with an ROCE of 32.0%, ROE of 24.0%, and an operating profit margin (OPM) of 29.5%.
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