Debt Free Companies in India 2017

India experiences both high inflation and high interest rates. Immediate effect of both on companies finance is negative. High interest rates clearly affect companies operating costs & profit margins. Companies which remain isolated from effects of high interest rates are debt free companies.



The companies which are more dependent on debt to manage their working capital, face the burnt of high interest rates. Interest rates of debt is fluctuating. When interest rates goes up, it will eventually increase the expense of company. This will automatically translate in profitability of the company.

Zero debt companies in India are ones which are more self reliant. Such companies are best suited for long term investing.

Profitability of zero debt companies are generally more than high debt companies. Debt is a liability which has also a big cost attached to it. Debt gives immediate relief but its also an expense for the future. Hence companies will lesser profit but zero debt are preferable.

In India we have several zero debt companies.

It will be not be wrong for us to base our investment decision starting from such companies.

High interest rates negatively effects the profitability of high debt companies. In periods of soaring interest rates, low debt and debt free companies emerge as clear winners.

In India, interest rates remain very unpredictable. One never know when rising trend will start again. This mainly happens mainly due to wavering inflation.

In India inflation can stabilizes for few year. But even with minor changes on political front, inflation cuts deep again.

For investors it is important to keep a note of debt free companies in India. Keeping track of price valuation of zero debt companies is a very good idea. Timing purchase of such stocks is recommended. I personally like debt free companies.

Study of debt levels of companies certainly helps. How dependent is company on debt, over long periods of time, speaks a lot about its fundamentals.

Only single year study will not be enough. Hence it is advisable to keep last 5 years financial reports of companies handy.

In this age of fast internet we can keep soft copies of financial statements. Internet enables access to information related to companies with click of a button.

http://www.getmoneyrich.com/product/stock-analysis-worksheet/

Notes on Debt Free Companies:

1) Debt free companies are profitable stocks.
2) High interest rates reduces profitability of debt companies.
3) Zero debt companies have strong business fundamentals.
4) Debt free companies stocks must be preferred for investing.
5) Keeping ready-list of debt free companies is a good.

Interest Expense & Net Profit

Even small increase in interest rates can create big hole in companies profits.

A company, whose turnover is Rs 34,000 Crore & incurs Rs 1,300 Crore of Interest Expense.

This interest expense is 3.8% of total turnover of company.

In terms of expense requirements, 3.8% expense on any one item is is considers very high.

Even marginal increase in interest expense can effect profitability. To negate high interest costs, companies avoid maintaining high debts.

In case debt levels cannot be reduced, companies profits reduces. This is one compromise high debt companies makes all the time.

Debt free companies are completely free of such compromises.

Companies which are debt free generates their liquid cash comparatively easily. This cash is used to manage current liabilities.

When there is no debt (immediate interest expense), companies liquidity level remains good. This makes day-to-day cash cash flow management relatively simpler.

Debt Free Companies are Ideal

Debt free companies are low risk companies for investors. Not only investors but even bankers love such companies. When need comes and such companies need debt, banks can lend them debt at low interest rates.

For investors, debt free companies are investment heavens. Debt free companies are like ‘financially independent’ business.

Such companies has enough cash generating source of their own. They do not need market debt to run their business.

This situation may sound simple, but it take decades for companies to reach this stage.

It has also been observed that, generally debt free companies share higher dividends with its shareholders.

If company is focusing on long term growth, they may not distribute high dividends. But big, debt free companies share reasonably high dividends and also manage fast growth.

Zero Debt & Business Fundamentals

In order to understand this correlation, lets take an example. Look into NMDC’s balance sheet. In last 10 years NMDC had zero debt. During the same period, company was able to increase its reserves at staggering rate of 28% per annum.

Zero debt and fast increasing reserves is an excellent indicator of strong business fundamentals.

NMDC’s is good example of debt free company. Looking at companies Profit & loss accounts, NMDC’s ‘Total Income’ has increased at rate of 19% per annum. While NMDC’s ‘Total expense’ has increased at rate of only 15% per annum. This differential between income and expense enhances companies profit and profitability. NMDC’s profit and profitability both has improved in last 10 years.

Debt Free Companies in India

All debt free companies are Good?

Generally debt free companies are good bet for investment. But all debt free companies may not be good.

A scrutiny of business fundamentals is a must before one goes ahead and buy their stocks.

Its will be good idea to check companies ‘Total Income growth (sales turnover)’. Though company is maintaining zero debt but; if it is not able to increase turnover, it will not be considered good.

To get more idea, compare sales turnover of company with its nearest competitors.

Concept says, it’s a good practice to keep debt levels as low as possible. But this should not be done at cost of ‘business growth’.

Companies which are compromising its growth are either complacent or does not have skillful & dynamic top managers.

A combination of high sales growth and low debt is ideal. Investors must keep track of such companies. Also, companies maintaining high profit margins automatically becomes most preferred by investors.

Debt Free Companies in India 2017

(Updated on July’2017)

SL Stocks Market Capitalization (Rs.) EBITDA Margin (%) PEG (5Y) Debt/Equity (%)
1 Icici Prudential Life Insurance Comp Ltd   666.72B 4.63 10.17 0.00
2 Sun TV Network Ltd.   330.06B 68.69 9.53 0.00
3 ACC Ltd   328.24B 12.06 -3.59 0.00
4 Bajaj Holdings And Investment Ltd   249.33B 74.43 1.26 0.00
5 Castrol India Limited   202.37B 28.72 4.24 0.00
6 CRISIL Ltd.   136.62B 28.82 6.26 0.00
7 Larsen & Toubro Infotech Ltd   134.03B 18.92 0.79 0.00
8 Sanofi India Ltd   96.82B 21 3.36 0.00
9 Abbott India Limited   95.39B 13.52 - 0.00
10 FAG Bearings India Limited   75.48B 15.73 17.17 0.00
11 Hexaware Technologies Limited   72.70B 16.8 1.87 0.00
12 Dr. Lal PathLabs Ltd   71.16B 25.93 1.64 0.00
13 CMC Limited (Parent)   61.51B 14.87 1.59 0.00
14 Tata Elxsi Limited   53.59B 22.06 0.81 0.00
15 VST Industries Limited   51.86B 25.96 9.55 0.00
16 Ge Power India Ltd   42.92B 12.04 - 0.00
17 ICRA Ltd   39.58B 30.29 7.81 0.00
18 Thyrocare Technologies Ltd   38.87B 38.36 - 0.00
19 Vesuvius India Ltd   28.32B 17.62 3.21 0.00
20 Swaraj Engines Limited   27.20B 15.72 7.29 0.00
21 V I P Industries Ltd   25.26B 10.34 6.86 0.00
22 Accelya Kale Solutions Ltd   20.55B 40.87 - 0.00
23 JSW Holdings Ltd   19.51B 93.76 3.22 0.00
24 Novartis India Limited   17.98B 3.95 -1.99 0.00
25 Elantas Beck India Ltd   16.10B 21.33 1.68 0.00
26 Kennametal India Limited   14.58B 8.71 -2.04 0.00
27 Kirloskar Pneumatic Company Ltd   13.80B 11.31 -8.23 0.00
28 Honda Siel Power Products Limited   13.79B 13.47 11.94 0.00
29 Bhansali Engineering Polymers Ltd.   13.39B 8.87 0.39 0.00
30 Tata Sponge Iron Ltd   12.94B 10.02 -4.47 0.00
31 Shanthi Gears Ltd.   12.34B 17.47 -12.57 0.00
32 Automotive Axles Ltd.   10.94B 9.79 - 0.00
33 Esab India Limited   10.49B 8.29 - 0.00
34 Atul Auto Ltd   9.27B 12.59 1.59 0.00
35 Kalyani Investment Co Ltd   8.03B 94.79 0.71 0.00
36 HPC Biosciences Ltd   7.45B 60.69 -48.47 0.00
37 OnMobile Global Limited   7.43B 13.89 -1.99 0.00
38 DISA India Ltd   7.13B 9.55 - 0.00
39 Reliance Industrial Infrastructure Ltd   6.98B 24.53 -6.64 0.00
40 Sulabh Engineers and Services Ltd   6.96B 91.88 15.55 0.00
41 G M Breweries Ltd   6.51B 18.37 0.57 0.00
42 Sai Baba Investment & Com Entrprs Ltd   6.33B 69.18 - 0.00
43 Multibase India Ltd   6.15B 21.87 1.07 0.00
44 Effingo Textile & Trading Ltd   5.92B 4.27 - 0.00
45 Stovec Industries Ltd   5.33B 17.11 1.28 0.00
46 DIC India Ltd   5.26B 4.09 -12.23 0.00
47 Goodricke Group Ltd.   4.98B 7.85 - 0.00
48 Anuh Pharma Ltd   4.64B 11.24 4.04 0.00
49 Fiberweb (India) Ltd   4.52B 15.26 0.54 0.00
50 Voith Paper Fabrics India Ltd   3.61B 30.78 - 0.00
51 Eimco Elecon Ltd.   3.60B 11.81 3.63 0.00
52 Cupid Ltd   3.49B 39.03 0.16 0.00
53 Mount Everest Mineral Water Ltd.   3.47B 5.71 - 0.00
54 Pil Italica Lifestyle Ltd   3.35B 4.73 - 0.00
55 Svaraj Trading and Agencies Ltd   3.07B 25.28 -8.36 0.00
56 ABM Knowledgeware Ltd   2.92B 29.7 3.33 0.00
57 GeeCee Ventures Limited   2.85B 4.26 - 0.00
58 Moryo Industries Ltd   2.51B 1.19 - 0.00
59 Indian Toners & Developers Ltd   2.26B 21.89 1.44 0.00
60 International Travel House Ltd.   2.06B 13.32 -1.73 0.00
61 Yantra Natural Resources Ltd   1.84B 2.48 - 0.00
62 Dhanleela Investments & Trading Co Ltd   1.67B 13.89 - 0.00
63 Mahavir Advanced Remedies Ltd   1.63B 51.82 - 0.00
64 De Nora India Ltd   1.59B 16.4 - 0.00
65 Pressman Advertising Ltd   1.56B 20.32 - 0.00
66 UP Hotels Ltd.   1.52B 12.02 -1.61 0.00
67 James Warren Tea Ltd   1.51B 3.62 - 0.00
68 Mangalam Industrial Finance Ltd   1.44B 5.67 - 0.00
69 Fortis Malar Hospitals Ltd   1.25B 14.84 11.14 0.00
70 ADC India Communications Limited   1.20B 5.82 - 0.00
71 ARC Finance Ltd   1.06B 2.7 - 0.00
72 Amrapali Fincap Ltd   940.80M 3.74 - 0.00
73 Narmada Gelatines Ltd   865.09M 4.27 -1.18 0.00
74 Supremex Shine Steels Ltd   820.04M 2.62 - 0.00
75 Elegant Marbles & Granite Industries Ltd   711.00M 5.38 1.06 0.00
76 Fervent Synergies Ltd   690.00M 6.85 1.27 0.00
77 Tyche Industries Ltd   657.29M 14.07 16.54 0.00
78 Mishka Finance and Trading Ltd   652.61M 21.47 - 0.00
79 Asya Infosoft Ltd   648.10M 32.13 - 0.00
80 Abhinav Capital Services Ltd   623.21M 92.39 0.43 0.00
81 Prime Property Development Corp. Ltd.   575.39M 23.02 - 0.00
82 Bcpl International Ltd   564.99M 71.1 - 0.00
83 Sagar Productions Ltd   541.92M 10.06 1.21 0.00
84 Zenith Fibres Ltd   522.59M 13.87 1.12 0.00
85 Poona Dal And Oil Industries Ltd   514.01M 4.72 0.17 0.00
86 Daikaffil Chemicals India Ltd   475.48M 15.8 0.16 0.00
87 Welcast Steels Ltd   473.87M 1.21 -3.52 0.00
88 Real Touch Finance Ltd   376.97M 84.79 - 0.00
89 Sujala Trading & Holdings Ltd   373.34M 16.04 - 0.00
90 Swagruha Infrastructure Ltd   335.89M 24.23 - 0.00
91 Franklin Leasing and Finance Ltd   333.01M 8.42 1.03 0.00
92 Cni Research Ltd   315.71M 5.31 - 0.00
93 Omansh Enterprises Ltd   222.76M 2.54 - 0.00
94 Unno Industries Ltd   208.95M 5.61 - 0.00
95 Prithvi Exchange (India) Ltd   205.97M 32.14 0.68 0.00
96 Zodiac JRD MKJ Ltd   171.87M 3.86 2.43 0.00
97 Sam Industries Ltd   140.82M 19.18 -0.42 0.00
98 Econo Trade India Ltd   139.28M 1.79 - 0.00
99 Jain Studios Ltd   133.10M 1.38 - 0.00
100 Nova Publications India Ltd   113.48M 1.79 2.68 0.00
101 Dhampure Speciality Sugars Ltd   112.51M 1.47 -48.75 0.00
102 BAMPSL Securities Ltd   94.71M 31.28 -0.80 0.00
103 Morgan Ventures Ltd.   92.55M 72.43 - 0.00
104 Adinath Exim Resources Ltd   90.29M 18.18 1.81 0.00
105 Hasti Finance Ltd   84.98M 5.02 -5.90 0.00
106 Patidar Buildcon Ltd   81.19M 13.29 - 0.00
107 EPIC Energy Ltd   67.50M 2.73 - 0.00
108 Adinath Bio-Labs Limited   66.22M 25.36 -3.12 0.00
109 Mavens Biotech Ltd   51.66M 15.66 -1237.17 0.00
110 Sowbhagya Media Ltd   49.08M 3.28 0.98 0.00
111 Brakes Auto (India) Ltd   19.50M 13.89 - 0.00





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Mani
I am a Blogger with a passion for investment education. I started blogging in 2007-08. Blogging didn’t happened to me as a coincidence, it was a conscious decision. The idea with which I started blogging still stands true. In my starting days my finances remained tight. I was reading heavily about how to manage finance. One day I got hold of a book which my father gifted me in 2003. It was stacked below my graduation books. It was a small-thin book with its cover named "Rich Dad Poor Dad".....more

47 Comments on "Debt Free Companies in India 2017"

  1. Lakshmanakumar | August 18, 2017 at 6:52 am | Reply

    Very good Information for fresh investor like me. Thanks and keep going

  2. I am planning to invest in Penny stocks for a long term. Can you please guide. Open to buy in bulk

  3. V Nice info

  4. i have been trading for last 10yrs but made nothing .Please give me some guidance to keep some stocks for long term to cover my huge loss .

    • Ravi, avoid trading and opt for long term investing. Suggestion is to buy fundamentally strong stocks at undervalued price levels. This is easier said than done. This is why we suggest our readers to learn stock analysis for long term investing.

  5. Good information.Great work indeed. Thanks a lot.

  6. Shubho Mukherjee | January 21, 2017 at 12:43 am | Reply

    You have not mentioned anything about the charges that may apply on conditions as applicable to me for the subscribe which makes me a little circumspect bcoz all details then have not been provided to me . I will be in a better position to comment only if I have received certain information from U on a continuing basis for at least six months. On a plain reading what U have informed is definitely very informative and acceptable even by common sense wisdom and interesting to read as well

  7. Thanks a lot. Very informative. May God Bless You.

  8. hanumanth mokashi | January 10, 2017 at 2:51 pm | Reply

    I am 10 year old investors but still I am not gain in stock equity market so kindly only one single multibagger share shared me

  9. Good work

  10. Very lucid& informative for the layman to stwho wants to enter the jungle to stay away , where jackals & wolfs ,quacks proclaiming themselves as the pundits regarding stocks

  11. Its so informative ji.

  12. hi..very good insight..please share if you found any good fundamental penny stocks for 10 years long term

  13. Appreciated, Very useful information, Thank you.Please let me know id you have some penny stock suggestion
    Thank you
    BR

  14. Hello to every one, the contents present at this site are actually remarkable for people
    experience, well, keep up the good work fellows.

  15. very useful information. thanks for sharing such a fantastic article.please share me only 10 debt free stocks which can i buy in my portfolio.

  16. This is providing very good information. Really very good article who want to invest in good n debt free companies.

  17. I found the information you provided very useful. Now I am a retired person. Therefore tell me some penny stocks which are debt free, growing companies and management is good. Or you. may suggest some other modus operandi for making wealth by investing in stocks.

  18. reeses fun size | September 9, 2016 at 4:42 pm | Reply

    Right here is the right site for anybody who would like to understand this topic.
    You understand a whole lot its almost hard to argue
    with you (not that I personally would want to…HaHa). You definitely put a fresh spin on a topic that has been written about for many
    years. Great stuff, just wonderful!

  19. CHANDRASEKAR V | September 8, 2016 at 3:03 pm | Reply

    very useful information for beginners who wants to understand the stock market. Thank you

  20. Thank you Dude. Excellent Article and presented in simple form.
    Great Job.

  21. Krishna Kumar | August 26, 2016 at 8:47 pm | Reply

    Can you throw light on these two debt free companies. Are they good for investment? Kailash Auto Finance Ltd and Jmd Telefilms Industries Ltd

  22. I am intrested in debt free company, and i checked hear list of 70 debt free companies.I t is good information

  23. My son is 23 year old and your advice for long term saving from his salary in mutual fund and equity market, pl mention the select companies in both category

  24. Hi,
    Recently 63 Moons Technologies Ltd. was a favourite? I do not see this again in this update? Any recent negative development?

  25. I want to invest 1 lac re in share market for 10 year prospective , suggest me 5 multibager stocks.

  26. excellent

  27. Thanks a lot for sharing this, it is really helpful

  28. You provided all the details in very lucid manner.

  29. Arunachalam swaminathan | March 15, 2016 at 2:08 pm | Reply

    Very useful,information, compiled with deligence. Thanks

  30. VERY GOOD

  31. Mohammad Aamir | January 6, 2016 at 4:01 pm | Reply

    Congratulations, dear. The article provides the precise information I was looking for all around but unable to find. Very, very informative. Thanks again for this extremely useful post.

  32. dhananjay m sonsurkar | December 28, 2015 at 11:34 am | Reply

    very good information for new investors. please guide me for small & midcap multibagger stocks.

  33. awesome analysis

  34. good information about debt free company

  35. Chandrakant patel | October 22, 2015 at 4:23 pm | Reply

    Please guide me for small and multibagger stocks ,i am new in market

  36. out of my 20 years experience as investor of stocks I observe and learnt that investing in debt free stocks one can relax freely even when the stock market crashed.

  37. Good one

  38. I like zero debt free company

  39. I AM V HAPPY TO SEE THIS POST ,I WAS SEARCHING FOR THIS INFORMATION , PLEASE GIVE SOME INFORMATION ON FII HOLDINGS & AND HOW LARGE HOLDINGS HELP TO GROW THE COMPANY

  40. Sanyam jain | May 10, 2015 at 6:47 am | Reply

    Investing in Debt free companies are like investing in g-secs because their chances of running down are pretty low as compared to high debt cimpanies. But it takes decades for companies to become totally debt-free.

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