• 简

    • -+ 0.00%
    -+ 0.00%
    -+ 0.00%

    Apex Frozen Foods (NSE:APEX) Could Be Struggling To Allocate Capital

    Simply Wall St·01/06/2026 00:36:30
    语音播报

    Ignoring the stock price of a company, what are the underlying trends that tell us a business is past the growth phase? A business that's potentially in decline often shows two trends, a return on capital employed (ROCE) that's declining, and a base of capital employed that's also declining. This indicates to us that the business is not only shrinking the size of its net assets, but its returns are falling as well. Having said that, after a brief look, Apex Frozen Foods (NSE:APEX) we aren't filled with optimism, but let's investigate further.

    We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

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

    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 Apex Frozen Foods, this is the formula:

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

    0.044 = ₹226m ÷ (₹6.3b - ₹1.1b) (Based on the trailing twelve months to September 2025).

    So, Apex Frozen Foods has an ROCE of 4.4%. Ultimately, that's a low return and it under-performs the Food industry average of 14%.

    View our latest analysis for Apex Frozen Foods

    roce
    NSEI:APEX Return on Capital Employed January 6th 2026

    Above you can see how the current ROCE for Apex Frozen Foods compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Apex Frozen Foods .

    How Are Returns Trending?

    We are a bit worried about the trend of returns on capital at Apex Frozen Foods. About five years ago, returns on capital were 17%, however they're now substantially lower than that as we saw above. On top of that, it's worth noting that the amount of capital employed within the business has remained relatively steady. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. If these trends continue, we wouldn't expect Apex Frozen Foods to turn into a multi-bagger.

    On a side note, Apex Frozen Foods has done well to pay down its current liabilities to 18% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE.

    Our Take On Apex Frozen Foods' ROCE

    In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock. In spite of that, the stock has delivered a 6.9% return to shareholders who held over the last five years. Either way, we aren't huge fans of the current trends and so with that we think you might find better investments elsewhere.

    One final note, you should learn about the 2 warning signs we've spotted with Apex Frozen Foods (including 1 which makes us a bit uncomfortable) .

    While Apex Frozen Foods may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.