Keeping it up

If you invest Rs 100 today and the rate of return is 20 per cent, you will get Rs 120 after one year. Now, at the beginning of the next year, if you invest Rs 100 more, it will take the total capital invested to Rs 220. The question is whether you will be able to generate at least 20 per cent to justify the new investment. Companies also face the same dilemma. No doubt it would be challenging to generate additional returns on capital employed (ROCE) when the base of capital is higher but there are some companies which have achieved this feat. In order to further improve the criterion, we applied the following two filters: The change in capital base (debt + equity) over five years should be at least 10 per cent per annum. The minimum ROCE should be 15 per cent. Only three companies from the listed universe were