The Return Trends At Uno Minda (NSE:UNOMINDA) Look Promising

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. With that in mind, we've noticed some promising trends at Uno Minda (NSE:UNOMINDA) so let's look a bit deeper.

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What Is Return On Capital Employed (ROCE)?

For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Uno Minda, this is the formula:

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

0.18 = ₹14b ÷ (₹117b - ₹41b) (Based on the trailing twelve months to June 2025).

Therefore, Uno Minda has an ROCE of 18%. In absolute terms, that's a satisfactory return, but compared to the Auto Components industry average of 13% it's much better.

View our latest analysis for Uno Minda

Above you can see how the current ROCE for Uno Minda compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Uno Minda .

What Does the ROCE Trend For Uno Minda Tell Us?

Investors would be pleased with what's happening at Uno Minda. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 18%. The amount of capital employed has increased too, by 135%. So we're very much inspired by what we're seeing at Uno Minda thanks to its ability to profitably reinvest capital.

What We Can Learn From Uno Minda's ROCE

All in all, it's terrific to see that Uno Minda is reaping the rewards from prior investments and is growing its capital base. Since the stock has returned a staggering 673% to shareholders over the last five years, it looks like investors are recognizing these changes. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence.

While Uno Minda looks impressive, no company is worth an infinite price. The intrinsic value infographic for UNOMINDA helps visualize whether it is currently trading for a fair price.

While Uno Minda isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.