Profitability

What is ROE (Return on Equity)?

ROE measures how effectively a company uses shareholders' equity to generate profits, the ultimate test of whether management is creating value for owners.

Formula

ROE = Net Income ÷ Shareholders' Equity × 100

How to Interpret

Consistently high ROE (>15%) over 5+ years suggests a durable competitive advantage. Be cautious of high ROE driven by excessive debt. US large-caps (S&P 500) average 15–18% ROE; India's Nifty 50 averages similar.

Typical Ranges

Above 15% is good, above 20% is excellent. US benchmark: S&P 500 averages 15–18%. India: Nifty 50 averages 14–16%. Compare within sector.

Analyze ROE (Return on Equity) by Indian Market Sector

See how roe (return on equity) varies across major Indian (NSE/BSE) market sectors. US sector benchmarks are summarised in the Typical Ranges section above.

Banking & Financial Services Information Technology Pharmaceuticals & Healthcare FMCG (Fast-Moving Consumer Goods)Automobile & Auto Components Energy & Oil & Gas Infrastructure & Construction Real Estate Telecom Metals & Mining Chemicals & Specialty Chemicals Insurance

Learn More in the Academy

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ROE & ROAAccounting

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Return on CapitalEquities

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Profitability RatiosFundamental Analysis

Find Stocks Using This Metric

Use the Equiscale Stock Screener to filter US or Indian stocks by ROE.

US Stock Screener →Indian Stock Screener →