Niraj Cement Structurals (NSE:NIRAJ) Might Have The Makings Of A Multi-Bagger

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base 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. So on that note, Niraj Cement Structurals (NSE:NIRAJ) looks quite promising in regards to its trends of return on capital.

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Understanding Return On Capital Employed (ROCE)

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 Niraj Cement Structurals:

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

0.092 = ₹237m ÷ (₹3.9b - ₹1.3b) (Based on the trailing twelve months to September 2025).

Therefore, Niraj Cement Structurals has an ROCE of 9.2%. In absolute terms, that's a low return and it also under-performs the Construction industry average of 15%.

See our latest analysis for Niraj Cement Structurals

Historical performance is a great place to start when researching a stock so above you can see the gauge for Niraj Cement Structurals' ROCE against it's prior returns. If you're interested in investigating Niraj Cement Structurals' past further, check out this free graph covering Niraj Cement Structurals' past earnings, revenue and cash flow.

So How Is Niraj Cement Structurals' ROCE Trending?

Even though ROCE is still low in absolute terms, it's good to see it's heading in the right direction. The numbers show that in the last five years, the returns generated on capital employed have grown considerably to 9.2%. Basically the business is earning more per dollar of capital invested and in addition to that, 34% more capital is being employed now too. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers.

The Bottom Line

All in all, it's terrific to see that Niraj Cement Structurals is reaping the rewards from prior investments and is growing its capital base. Astute investors may have an opportunity here because the stock has declined 29% in the last five years. So researching this company further and determining whether or not these trends will continue seems justified.

If you'd like to know more about Niraj Cement Structurals, we've spotted 4 warning signs, and 3 of them are concerning.

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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.