Reinvestment rate

The share of after-tax operating profit that goes back into the business as capital spending above depreciation, plus the increase in working capital.

A company with ₹720 crore of net operating profit after tax, spending ₹460 crore on plant against ₹380 crore of depreciation and adding ₹210 crore of working capital, reinvests ₹290 crore, or 40.3%.

The number matters because growth is not free. Every rupee of additional revenue needs assets behind it, and the reinvestment rate measures how many rupees of profit that consumes.

Multiply it by the return on invested capital and you get the growth rate the business can sustain from its own resources.

That identity is the engine of every long-horizon model.