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- NSEI:JITFINFRA
JITF Infralogistics (NSE:JITFINFRA) Might Have The Makings Of A Multi-Bagger
To find a multi-bagger stock, what are the underlying trends we should look for in a business? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Speaking of which, we noticed some great changes in JITF Infralogistics' (NSE:JITFINFRA) returns on capital, so let's have a look.
Return On Capital Employed (ROCE): What Is It?
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. Analysts use this formula to calculate it for JITF Infralogistics:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.14 = ₹4.4b ÷ (₹43b - ₹12b) (Based on the trailing twelve months to June 2024).
Therefore, JITF Infralogistics has an ROCE of 14%. That's a relatively normal return on capital, and it's around the 13% generated by the Infrastructure industry.
Check out our latest analysis for JITF Infralogistics
Historical performance is a great place to start when researching a stock so above you can see the gauge for JITF Infralogistics' ROCE against it's prior returns. If you're interested in investigating JITF Infralogistics' past further, check out this free graph covering JITF Infralogistics' past earnings, revenue and cash flow.
What Can We Tell From JITF Infralogistics' ROCE Trend?
The trends we've noticed at JITF Infralogistics are quite reassuring. The data shows that returns on capital have increased substantially over the last five years to 14%. The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 122%. 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 On JITF Infralogistics' ROCE
All in all, it's terrific to see that JITF Infralogistics is reaping the rewards from prior investments and is growing its capital base. Since the stock has returned a staggering 12,036% to shareholders over the last five years, it looks like investors are recognizing these changes. Therefore, we think it would be worth your time to check if these trends are going to continue.
On a final note, we've found 2 warning signs for JITF Infralogistics that we think you should be aware of.
If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive 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.
About NSEI:JITFINFRA
JITF Infralogistics
Through its subsidiaries develops urban infrastructure and water infrastructure in India and internationally.