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Hi-Tech Pipes Limited (NSE:HITECH) Earns A Nice Return On Capital Employed – Simply Wall St News



Today we are going to look at Hi-Tech Pipes Limited (NSE:HITECH) to see whether it might be an attractive investment prospect. In particular, we’ll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business.

First up, we’ll look at what ROCE is and how we calculate it. Next, we’ll compare it to others in its industry. Last but not least, we’ll look at what impact its current liabilities have on its ROCE.

Understanding Return On Capital Employed (ROCE)

ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. All else being equal, a better business will have a higher ROCE. Ultimately, it is a useful but imperfect metric. Renowned investment researcher Michael Mauboussin has suggested that a high ROCE can indicate that ‘one dollar invested in the company generates value of more than one dollar’.

How Do You Calculate Return On Capital Employed?

The formula for calculating the return on capital employed is:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)

Or for Hi-Tech Pipes:

0.25 = ₹625m ÷ (₹5.4b – ₹2.9b) (Based on the trailing twelve months to September 2019.)

So, Hi-Tech Pipes has an ROCE of 25%.

View our latest analysis for Hi-Tech Pipes

Is Hi-Tech Pipes’s ROCE Good?

ROCE can be useful when making comparisons, such as between similar companies. Using our data, we find that Hi-Tech Pipes’s ROCE is meaningfully better than the 14% average in the Metals and Mining industry. I think that’s good to see, since it implies the company is better than other companies at making the most of its capital. Setting aside the comparison to its industry for a moment, Hi-Tech Pipes’s ROCE in absolute terms currently looks quite high.

You can see in the image below how Hi-Tech Pipes’s ROCE compares to its industry.

NSEI:HITECH Past Revenue and Net Income, December 8th 2019

It is important to remember that ROCE shows past performance, and is not necessarily predictive. ROCE can be deceptive for cyclical businesses, as returns can look incredible in boom times, and terribly low in downturns. This is because ROCE only looks at one year, instead of considering returns across a whole cycle. Remember that most companies like Hi-Tech Pipes are cyclical businesses. You can check if Hi-Tech Pipes has cyclical profits by looking at this free graph of past earnings, revenue and cash flow.

What Are Current Liabilities, And How Do They Affect Hi-Tech Pipes’s ROCE?

Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. Due to the way the ROCE equation works, having large bills due in the near term can make it look as though a company has less capital employed, and thus a higher ROCE than usual. To counter this, investors can check if a company has high current liabilities relative to total assets.

Hi-Tech Pipes has total assets of ₹5.4b and current liabilities of ₹2.9b. Therefore its current liabilities are equivalent to approximately 53% of its total assets. Hi-Tech Pipes boasts an attractive ROCE, even after considering the boost from high current liabilities.

The Bottom Line On Hi-Tech Pipes’s ROCE

So we would be interested in doing more research here — there may be an opportunity! Hi-Tech Pipes looks strong on this analysis, but there are plenty of other companies that could be a good opportunity . Here is a free list of companies growing earnings rapidly.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


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How to Check Oil – Dipstick or Glass Reader Method




How to Check Oil

All the fluids in your motor vehicle – including the oil– are essential as they help your engine to run smoothly. Frequently checking if your motor vehicle has enough, unworn-out oil helps to keep it running well for a long time. It also improves the performance of your car and prevents your car from breaking down unexpectedly.

There are two oil level indicators that you can use to check air compressor oil. The first indicator is the dipstick, which uses a graduated rod to measure the depth of oil. The second is the sight glass, which, unlike the dipstick method, does not involve pulling out a rod.

Read on to find out how you should check oil using the dipstick and sight glass methods. Also, you’ll learn the importance of checking oil regularly, how to detect the correct oil level, signs of aged oil, as well as how to change it.

How to check oil using the dipstick method?

Before checking oil, you should always make sure that the engine isn’t hot to avoid burning yourself. If your engine was running, give it about ten minutes to cool off.

A cool engine will allow the oil to settle at the bottom of the oil pan. Consequently, you’ll get a more accurate reading. How do you read oil on a dipstick?

Here are a few steps that you should follow when using the dipstick method:

  1.  Make sure that your vehicle is on a flat surface and open the hood. Note that if your car is not on a level surface, you’ll get a wrong oil dipstick reading.

2. Pull out the dipstick smoothly and wipe it off using a clean rag. If you are wondering where the dipstick in your car or motorcycle is, it is connected to the oil tank near the front of the engine.

3. After wiping the dipstick using a clean rag, you’ll see that it has two marks on it. The top mark represents the upper limit, while the bottom one represents the lower limit. The trick is to ensure that your oil level is always in between these two limits.

4. After wiping the dipstick, reinsert it by pushing it all the way down. In case the dipstick gets stuck, remove it and wipe it before inserting it again.

5. Remove the dipstick and check the oil level. If the level is below the bottom mark, then it is time to add more oil. If it is at or slightly below the top mark, then you do not have to add more oil.

Aside from checking the quantity of the oil, you also need to check its quality to determine if it’s time to change it. We’ll discuss more on when to change the oil after exploring the sight glass method.

How to check oil using the sight glass method?

Oil sight glasses usually come in two forms; some have a circular mark at the center while others have do not have any mark. How does a sight glass work?

A sight glass works just like a dipstick, but it is a more convenient way to check your oil levels.

Site glass with a mark

If your quiet air compressor has a sight glass with a circular marking at the center, usually a red circle, the oil level should be between the center of the circle (the lower limit) and the upper edge of the circle (the upper limit).

If the oil is below the center of the circle, then you need to add more.

Sight glass without a mark

When reading a sight glass without a mark, make sure that the oil is between the 2/3 and the 1/3 mark. Some manuals require the oil to be at or above the ½ level. Therefore, make sure that you read the user manual before getting an oil reading on a site glass without a mark.

Signs of aged oil

What does the oil look like when it needs to be changed? If you check the oil and it; seems light, like the color of a cup of tea; is smooth and glossy; is transparent, then you do not need to change it. You can tell that oil is bad if:

  • It is opaque or too dark
  • It has a bad smell, like rotten cheese
  • It looks too thick
  • It has grainy particles of dirt or sludgy deposits
  • Your car’s tailpipe (exhaust) produces smoke instead of the normal translucent vapor

If you are still not sure that your oil needs changing after performing the dipstick or sight glass test, consider performing a blotter test.

Choosing oil for your car

Oil gradually starts getting dirty and worn out. If the oil does not meet the minimum requirements of your compressor, it’s time to change it.

Since there are dozens of options available on the market, it might be tempting to buy the first oil that you come across or to test out new oil every time you need to change oil.

That said, it is vital to keep in mind that engine oil is rated based on its viscosity at a said temperature. Therefore, not all oil is the best for your bike or car. Most manufacturers specify the best oil for the engine’s running temperature. Make sure that you read the owner’s manual before buying oil.

Troubleshooting common problems

Why is there no oil on dipstick?

If there is no oil on dipstick or sight glass and you have never added or replaced oil in your car or motorcycle, you are putting your engine in danger. Note that oil is the primary engine’s coolant, and without it, the engine will overheat and get damaged. If your dipstick has no oil, refill your oil pan ASAP.

Why are there bubbles in my oil?

Foaming in oil is a common problem that can be caused by water and solids contamination, mechanical issues, contamination with grease, or depleted defoamant. Foam can lead to excessive oxidation, which reduces the lubricating properties of the oil.

Make sure that you visit a mechanic as soon as you notice foam in your oil. To eliminate the bubbles, the oil might need a partial drain and refill, a full drain and refill, or a complete flush, depending on the contaminant.

In conclusion

Checking oil regularly is essential as it helps you to ensure that your engine is well lubricated and properly cooled. It also helps to promote vehicle longevity and decreases fuel consumption. Ensure that you check your oil at least once a month (preferably every week). Do not forget to use the steps and tips discussed in this article when checking your oil.


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Apple may be forced to ditch Lightning charge cable amid new EU rules




On September 7th Apple will release the highly anticipated iPhone 7. Design changes to the new model are suggested to affect the 3,5mm headphone jack, to be replaced with the proprietary Lightning jack.


The European Union (EU) is revamping plans that could force smartphone makers, such as Apple, to share the same charging method.

European policymakers want to make life easier for consumers as well as to reduce electronic waste across the 28-country region. As a result, they are looking at introducing a single universal charging cable. This would be particularly relevant for Apple given its different charging options.

“We are drowning in an ocean of electronic waste,” Roza Thun und Hohenstein, a European lawmaker said at the European Parliament Monday. “We cannot continue this way,” she added.

Old chargers generate more than 51 000 metric tons of electronic waste per year, according to the European Parliament. Lawmakers want one single charger that fits phones, tables, e-books and any other portable device. Apple’s Lightning connector cable, which is used to charge and sync different devices, would therefore be at risk.

However, Apple believes that the EU’s plan would hurt innovation.

“Regulations that would drive conformity across the type of connector built into all smartphones freeze innovation rather than encourage it. Such proposals are bad for the environment and unnecessarily disruptive for customers,” Apple said in a feedback form issued to the European institutions last year.

Apple, of its own choice, has already stopped using Lightning on the 2019 version of the iPad, moving to the USB-C port used on MacBooks. USB-C and micro-USB are also used on Android devices.

“This has been a long-term objective of the industry,” Dexter Thillien, a senior industry analyst at Fitch Solutions, told CNBC Friday. “Most Android devices already use the same charging system (USB-C and micro-USB), so it would impact Apple more than anybody else.”

However, Thillien also noted that Apple is already using USB for some iPads, “so it wouldn’t be completely new for them, and would only apply to future models.”

The EU pushed for a single charging mechanism back in 2014. At the time, the European Commission – the EU’s executive arm, tried to encourage smartphone makers to develop a solution among themselves. However, the voluntary scheme did not achieve what European policymakers wanted and they are now looking at putting it into law.

“It is never too late for industry to come up with a suitable proposal, but we now must consider the legislative approach,” a Commission source told CNBC via email.

The future is wireless

Smartphone developers, including Apple and Samsung, have presented devices that are charged wirelessly. Though the technology is still at its early stages, analysts believe this is the future.

“As tech wants to prove it’s becoming greener, (implementing a common charger system is) a move they might make without too much opposition. And obviously the future is wireless charging, so no need for cables,” Thillien told CNBC.

Apple shares are up by more than 100% over the last 12 months.


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New policy on Science, Technology & Innovation being framed by Centre





The government is working on a new National Science, Technology and Innovation Policy, to replace the existing policy framed in 2013, which will be forward-looking and have both a vision document as well as an action plan on the fundamental research required in crucial areas such as space, health, atomic physics and bio-technology, a senior official has said.

The Department of Science & Technology is steering the exercise and will soon initiate stakeholder interaction on what the new policy should include, said Principal Scientific Adviser to the Prime Minister K Vijay Raghavan in an interaction with journalists.

Nothing wrong with the existing policy

“There is nothing wrong with the existing policy. But it was made keeping in mind a snapshot of what the world was then (in 2013),” Vijay Raghavan said, adding that the older policy focussed more on what the problem areas were than on what was to be done.

There was no strict timeline at the moment for completing the exercise of drafting the new policy, but the stakeholder consultation process, which will be at four levels, would kick-off soon, he said.

The Principal Scientific Advisor pointed out that private investment in India in R&D was still very low and a suitable environment needed to be created to induce entities to invest. “One way to increase R&D spend in the country is to make it attractive for companies to invest,” he said.

Restoring the 200 per cent income tax deduction for in-house R&D spend, which was reduced to 150 per cent from April 1 2017, could be one way to encourage investment in the area. This has been a demand of the industry for a long time, Vijay Raghavan said.

Of the total R&D investments made in the country, 70 per cent is made directly by the government while 30 per cent of the investment comes from the industry. As much as 90 per cent of the industry investment is also made by the public sector units with private sector accounting for just 10 per cent (of 30 per cent), he added.

Consultation process

Sharing details of the consultation process for framing the new Science, Technology and Innovation policy, the Principal Scientific Adviser said that in the first level of consultations, the scientific community and industry representatives would talk to citizens of the country to find out what kind of scientific break-through and innovation were they looking for. This would help narrow down the field of new research for scientific development and innovation.

At the second level, the Centre would talk to State governments to discuss how both could work together to make a policy that would help them develop world-class products.

The third level of stakeholder consultations will be with various Ministries and Departments such as Railways, Shipping and Water Resources to find out what science and technology advantage would they need in their respective areas.

The fourth level of interaction would be horizontal, focussing on basic research needed in fundamental areas such as condensed matter physics, solid state physics, material research, etc. “We have to see where are we in these areas and what more needs to be done,” Vijay Raghavan said.


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