There's Been No Shortage Of Growth Recently For Jubilant FoodWorks' (NSE:JUBLFOOD) Returns On Capital

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So when we looked at Jubilant FoodWorks (NSE:JUBLFOOD) and its trend of ROCE, we really liked what we saw.

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Return On Capital Employed (ROCE): What Is It?

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Jubilant FoodWorks:

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

0.13 = ₹8.5b ÷ (₹88b - ₹21b) (Based on the trailing twelve months to September 2025).

Thus, Jubilant FoodWorks has an ROCE of 13%. In absolute terms, that's a satisfactory return, but compared to the Hospitality industry average of 7.9% it's much better.

Check out our latest analysis for Jubilant FoodWorks

In the above chart we have measured Jubilant FoodWorks' prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Jubilant FoodWorks for free.

The Trend Of ROCE

Investors would be pleased with what's happening at Jubilant FoodWorks. The data shows that returns on capital have increased substantially over the last five years to 13%. The amount of capital employed has increased too, by 161%. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed.

The Bottom Line On Jubilant FoodWorks' ROCE

To sum it up, Jubilant FoodWorks has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific. Since the stock has only returned 12% to shareholders over the last five years, the promising fundamentals may not be recognized yet by investors. So with that in mind, we think the stock deserves further research.

On a final note, we found 2 warning signs for Jubilant FoodWorks (1 is significant) you should be aware of.

While Jubilant FoodWorks 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.