We Like These Underlying Return On Capital Trends At ZF Commercial Vehicle Control Systems India (NSE:ZFCVINDIA)

What are the early trends we should look for to identify a stock that could multiply in value over the long term? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Speaking of which, we noticed some great changes in ZF Commercial Vehicle Control Systems India's (NSE:ZFCVINDIA) returns on capital, so let's have a look.

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

If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for ZF Commercial Vehicle Control Systems India:

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

0.15 = ₹5.0b ÷ (₹38b - ₹4.9b) (Based on the trailing twelve months to June 2025).

Therefore, ZF Commercial Vehicle Control Systems India has an ROCE of 15%. In absolute terms, that's a pretty normal return, and it's somewhat close to the Auto Components industry average of 13%.

View our latest analysis for ZF Commercial Vehicle Control Systems India

Above you can see how the current ROCE for ZF Commercial Vehicle Control Systems India 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 ZF Commercial Vehicle Control Systems India for free.

What Does the ROCE Trend For ZF Commercial Vehicle Control Systems India Tell Us?

ZF Commercial Vehicle Control Systems India is displaying some positive trends. The data shows that returns on capital have increased substantially over the last five years to 15%. The amount of capital employed has increased too, by 72%. So we're very much inspired by what we're seeing at ZF Commercial Vehicle Control Systems India thanks to its ability to profitably reinvest capital.

Our Take On ZF Commercial Vehicle Control Systems India's ROCE

A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what ZF Commercial Vehicle Control Systems India has. Since the stock has returned a staggering 122% to shareholders over the last five years, it looks like investors are recognizing these changes. 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.

On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for ZFCVINDIA on our platform that is definitely worth checking out.

For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.

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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.