Top 5 Companies With The Highest Return On Net Worth

Investopedia defines return on net worth (RONW) as the amount of net income returned as a percentage of shareholders’ equity. This return on equity, also known as return on net worth, measures a corporation's profitability by revealing how much profit it generates with the money that shareholders have invested. It is expressed as a percentage and calculated as: RONW = Net Income/Shareholder's Equity

Let’s take a look at the top 5 companies with a market capitalisation of more than Rs 100 crore that have the highest RONW as of FY13.

Hindustan Unilever: Hindustan Unilever (HUL) is India's largest Fast Moving Consumer Goods company with a heritage of over 75 years in the country. The company has over 16000 employees and an annual turnover of around Rs 25206 crore as of FY13. HUL is a subsidiary of Unilever, one of the world’s leading suppliers of fast moving consumer goods. Unilever has about 52% shareholding in HUL.

This company has topped the list, posting a RONW of 141.98% as of FY13. This has meant a return of more than 14% on a YTD basis for the shareholders.

Triveni Turbines: Triveni Turbines is a leading industrial steam turbine manufacturer with a dominant market share of 55% in India. Over 2500 steam turbines supplied by Triveni have been installed across 18 industries in over 40 European, African, Central & Latin American, SE Asian and SAARC countries.

The company had a RONW of 75.26% for FY13. However, its performance on the bourses was not encouraging as the stock prices have declined by 12.97% on a YTD basis.

Cairn India: Cairn India is amongst the world’s fastest-growing independent oil and natural gas exploration and production companies, with 1.3 billion boe (barrel of oil equivalent) of gross proven and probable reserves and resources as of March 31, 2013 and 205,323 boepd (barrels of oil equivalent per day) of average operated production in FY2013. Cairn India contributes almost 25 per cent to India’s domestic crude oil production.

The RONW of the company as of FY13 stands at 43.35% and the market capitalisation stands at Rs 62369 crore. The price performance has remained flat during the year, gaining merely 1.65% on a YTD basis.

Emami: Established in 1974, Emami is one of the leading and fastest growing personal and healthcare businesses in India. It has over 300 products based on ayurvedic formulations. Its portfolio consists of brand names such as Boroplus, Navratna, Fair and Handsome, Zandu balm, Mentho Plus balm and Fast Relief. The current operations comprise more than 60 countries including India, UK, Sri Lanka, Bangladesh, Nepal, as well as the African, GCC and CIS countries.

The stock prices of the company have declined by 17.43% on a YTD basis and its RONW stands at 41.65% as of FY13.

Tata Consultancy Services: Tata Consultancy Services, a subsidiary of Tata Sons, provides information technology (IT) services, consulting, and business solutions worldwide. The company was founded in 1968 and is headquartered in Mumbai.

The RONW of the company stands at 39.32% as of FY13 and the stock has provided a return of 60.18% on a YTD basis.