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Karnivesh

Simplifying finance.... • 12h

ROCE is one of those metrics that quietly reveals business quality. I look at it as a simple test: For every ₹100 of capital a company uses, how much value does it actually generate? Revenue growth and profit numbers can look impressive, but ROCE shows whether that growth is efficient or wasteful. Why it matters more today? • Capital is expensive in a higher-rate world • Debt-funded growth carries real risk • Inefficient expansion gets exposed faster High ROCE businesses usually share a few traits: • Strong pricing power • Disciplined capital allocation • Ability to grow without constant funding. Low ROCE, even with rapid growth, often signals value destruction over time. My takeaway: Growth attracts attention, but ROCE tells you if a business deserves long-term capital. If you want to judge business quality beyond headlines, this is a metric worth tracking closely.

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