Westlife Foodworld (NSE:WESTLIFE) Is Doing The Right Things To Multiply Its Share Price

What trends should we look for it we want to identify stocks that can multiply in value over the long term? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So when we looked at Westlife Foodworld (NSE:WESTLIFE) and its trend of ROCE, we really liked what we saw.

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What Is Return On Capital Employed (ROCE)?

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. To calculate this metric for Westlife Foodworld, this is the formula:

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

0.052 = ₹1.1b ÷ (₹27b - ₹5.5b) (Based on the trailing twelve months to September 2025).

So, Westlife Foodworld has an ROCE of 5.2%. In absolute terms, that's a low return and it also under-performs the Hospitality industry average of 7.9%.

See our latest analysis for Westlife Foodworld

Above you can see how the current ROCE for Westlife Foodworld 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 Westlife Foodworld for free.

So How Is Westlife Foodworld's ROCE Trending?

Westlife Foodworld has recently broken into profitability so their prior investments seem to be paying off. The company was generating losses five years ago, but now it's earning 5.2% which is a sight for sore eyes. And unsurprisingly, like most companies trying to break into the black, Westlife Foodworld is utilizing 60% more capital than it was five years ago. We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance.

What We Can Learn From Westlife Foodworld's ROCE

In summary, it's great to see that Westlife Foodworld has managed to break into profitability and is continuing to reinvest in its business. Considering the stock has delivered 33% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. So with that in mind, we think the stock deserves further research.

On a final note, we've found 1 warning sign for Westlife Foodworld that we think you should be aware of.

While Westlife Foodworld 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.