<div id="readability-page-1"><div><p>What are the early trends we should look for to identify a stock that could multiply in value over the long term?  Firstly, we'd want to identify a growing <em>return</em> on capital employed (ROCE) and then alongside that, an ever-increasing <em>base</em> of capital employed.  This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns.    However, after investigating <strong>Kamat Hotels (India)</strong> (NSE:KAMATHOTEL), we don't think it's current trends fit the mold of a multi-bagger.</p><p>AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.</p><h2> Understanding Return On Capital Employed (ROCE) </h2><p> 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 Kamat Hotels (India): </p><p> <strong>Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)</strong> </p><p>0.12 = ₹731m ÷ (₹6.7b - ₹767m) <em>(Based on the trailing twelve months to September 2025)</em>.</p><p> Thus, <strong>Kamat Hotels (India) has an ROCE of 12%. </strong> In absolute terms, that's a satisfactory return, but compared to the Hospitality industry average of 8.2% it's much better.  </p><p><span> See our latest analysis for Kamat Hotels (India) </span></p><figure><img height="632" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/20346347-roce-1-dark-2/1769227013386?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="666" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/20346347-roce-1-dark-2/1769227013386"/><figcaption>NSEI:KAMATHOTEL Return on Capital Employed January 24th 2026</figcaption></figure><p> While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above.  If you want to delve into the historical earnings , check out these <strong>free</strong> graphs detailing revenue and cash flow performance of Kamat Hotels (India). </p><h2> The Trend Of ROCE </h2><p> In terms of Kamat Hotels (India)'s historical ROCE movements, the trend isn't fantastic.   Around  five years ago the returns on capital were 29%, but since then they've fallen to 12%.    However it looks like Kamat Hotels (India) might be reinvesting for long term growth because while capital employed has increased, the company's sales haven't changed much in the last 12 months.  It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line.   </p> <p> On a related note, Kamat Hotels (India) has decreased its current liabilities to 12% of total assets.   Considering it used to be 85%, that's a huge drop in that ratio and it would explain the decline in ROCE.   Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk.  Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money.   </p> <h2> The Bottom Line </h2><p> Bringing it all together, while we're somewhat encouraged by Kamat Hotels (India)'s reinvestment in its own business, we're aware that returns are shrinking.        Investors must think there's better things to come because the stock has knocked it out of the park, delivering a 486% gain to shareholders who have held over the last  five years.   Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward.    </p><p> One more thing to note, we've identified  <strong> 2 warning signs </strong> with Kamat Hotels (India) and understanding them should be part of your investment process.   </p><p>While Kamat Hotels (India) isn't earning the highest return, check out this <strong>free</strong> list of companies that are earning high returns on equity with solid balance sheets.</p></div></div>

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<p>Kamat Hotels (India) (NSE:KAMATHOTEL) has a return on capital employed (ROCE) of 12%, which is above the hospitality industry average of 8.2%. However, its ROCE has declined from 29% five years ago, raising concerns about its long-term growth potential. The company has significantly reduced its current liabilities, which may impact its efficiency in generating ROCE. Despite a 486% gain for shareholders over the past five years, the stock may not be a multi-bagger moving forward. Investors should be aware of two warning signs related to the company.</p>

Be Wary Of Kamat Hotels (India) (NSE:KAMATHOTEL) And Its Returns On Capital