Investors may prioritise ROCE over earnings for valuing EMS companies: Report

NEW DELHI: Investors could increasingly look beyond earnings growth to return on capital employed (ROCE) when valuing electronics manufacturing services (EMS) companies, as firms with higher ROCE command premium valuations, according to a report by JPMorgan, cited by news agency ANI.

Strong revenue growth has driven a re-rating in price-to-earnings (P/E) multiples across the capital-intensive sector, though the brokerage emphasised that return metrics must be factored into future market valuations.