Quality & Compounders
Asset-Light High ROCE is a Quality & Compounders screen. It checks every NSE-listed stock against 3 conditions computed from nightly data, after excluding heavily pledged promoters and very small market caps. This page explains the rule, each figure and its source. It lists no stocks and is not advice.
The best businesses in the world do not need to own a lot of stuff to make a lot of money. FMCG companies, software platforms, financial intermediaries, and contract manufacturers all share this characteristic: a small physical asset base relative to the revenue it supports. When this asset-light structure is combined with high returns on capital and genuine top-line growth, it is a strong signal of a structural competitive moat — either brand equity, network effects, or a distribution advantage that competitors cannot replicate by simply spending more capex. The investor blind spot this screener addresses is that conventional valuation screens (P/E, EV/EBITDA) penalise asset-light businesses for high multiples without recognising that high multiples on asset-light compounders are often justified — the business requires very little incremental capital to grow, so the intrinsic value is much higher than asset-heavy peers at the same earnings level.
A stock must satisfy every condition below. Conditions are grouped under the pillar they test.
Capital Efficiency
Returns Quality
Hard excludes
Ranked by ROCE, highest first.
Fixed Assets to Total Assets (%)
Net fixed assets (property, plant, and equipment after depreciation) divided by total assets, expressed as a percentage, using the most recent annual balance sheet figures. For FinEdge, fixed assets field is fixedAssets (banks) or propertyPlantAndEquipment (non-banks).
Low is better
Return on Capital Employed (%)
EBIT divided by capital employed (total assets minus current liabilities), expressed as a percentage, using the most recent annual figures.
The quality gate. ROCE above 20% is the minimum; above 30% in an asset-light business is a strong moat indicator. ROCE captures the efficiency of the entire capital structure, not just equity — it is the right metric for comparing businesses with different leverage profiles. An asset-light business with low ROCE is likely a weak-moat distributor or a thin-margin services company, not a compounder.
High is better
Revenue 3-Year CAGR (%)
Compound annual growth rate of total revenue over the past three fiscal years, expressed as a percentage.
The growth filter. Revenue CAGR above 10% confirms the business is actively expanding its top line, not just maintaining a historic position. For asset-light businesses, revenue growth typically translates to profit growth with minimal incremental capex — which makes every additional rupee of revenue far more valuable than for an asset-heavy peer. Businesses with CAGR below 10% may have an excellent model but are not compounding, which limits the long-term thesis.
High is better
Type hypothetical values to see which conditions they satisfy. These are not real stocks and nothing here is stored.
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How many stocks pass if this threshold were set differently. Counts only; no stocks are named.
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We have not measured this screen yet, so there is no record to explain.
This is a historical, statistical measurement produced by FINOME TECHNOLOGIES PVT LTD's research harness on past data. It is not a prediction, and past results do not indicate future results. The universe is today's Nifty 500 constituents, so the sample is affected by survivorship bias. It describes how a screen's selections behaved in the past and does not constitute investment advice or a recommendation.
Rule version 1.0.0