RoCE: what it means and how to read it
What is RoCE?
Return on capital employed: operating profit ÷ all the money in the business, from shareholders and lenders.
Return on capital employed asks how much operating profit a business earns on all the money put into it, whoever supplied that money. Unlike ROE it counts lenders' capital too, so it cannot be flattered by borrowing. It is the cleanest single test of whether a business itself is any good.
A company creates value only when its ROCE is above what its capital costs. One earning 22% on capital that costs 11% turns every rupee it reinvests into more than a rupee of value; one earning 8% destroys value as it grows, however fast its sales rise.
How it is calculated
A worked example
Why does RoCE matter?
Shows the business's earning power no matter how it's funded.
What is a good RoCE?
15% or more is commonly seen as good. It should beat what the company pays to borrow.
15% or more is commonly seen as good and above 20% sustained over a decade is rare and valuable. Look at the ten-year average and the trend, not one year: a ROCE that holds up through bad years is worth far more than a spike. It does not apply to banks and lenders, whose borrowings are their raw material.
Reading scale
What are the common mistakes with RoCE?
What is a typical RoCE in India today?
The median across the 4867 listed companies that report it, as of 12 Oct 2026. Half sit above each figure and half below.
By company size
By industry
What is RoCE for India's largest companies today?
The latest figure for the largest companies with a page here. Each links to what the rest of that company's numbers mean.