Return on Equity is one of the most important return ratios for shareholders as it measures the final returns earned on a stock investment. With the earnings season ending, here’s a look at which group of stocks did better than the rest.
In the second quarter of financial year 2016-17, midcaps performed better than large and small cap stocks.
Return on equity ratios for the Nifty 50 and Nifty Smallcap indices have shown a negligible change quarter-on-quarter. The Nifty Midcap index is the only one in the second quarter that posted higher returns when compared to the previous quarter.
Nifty 50 companies’ return on equity remains higher, but unchanged at 13.2 percent when compared to last quarter. The Nifty Smallcap index has posted a negative return for the last four quarters in a row now.
On the other hand, the Nifty Midcap index has risen by 139 basis points in the second quarter, with the RoE at 7.23 percent versus 5.84 percent in first quarter.