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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.

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 January’2017)

SL Company name Market Price (Rs.) Market cap Revenue Growth (5Y) % EBITDA Margin (%) Total debt/equity (Recent yr) (%)
1 Dr. Lal PathLabs Ltd   1111.9 91.80B 27.24 30.35 0.00
2 Infosys Ltd   971.45 2.22T 17.82 27.37 0.00
3 Procter & Gamble Hygiene & Health Care   6850 221.84B 18.48 27.27 0.00
4 CRISIL Ltd.   2245.6 161.24B 17.04 28.83 0.00
5 Just Dial Ltd   375.75 26.16B 30.3 28.09 0.00
6 Vardhman Holdings Limited   1818 5.85B 43.77 92.58 0.00
7 Kalyani Investment Co Ltd   1190 5.22B 39.79 95.12 0.00
8 NESCO Ltd.   2110 29.59B 17.43 71.05 0.00
9 Tata Elxsi Limited   1392.9 43.38B 20.92 23.77 0.00
10 Max Financial Services Ltd   547 146.58B 11.86 42.74 0.00
11 JSW Holdings Ltd   1405 15.71B 15.91 92.2 0.00
12 Hindustan Zinc Ltd   264.25 1.12T 7.22 45.48 0.00
13 Sanofi India Ltd   4239.9 97.26B 15.11 22.76 0.00
14 Colgate-Palmolive (India) Limited   899.65 244.61B 12.73 21.52 0.00
15 Indraprastha Gas Limited   925 129.66B 16.14 20.94 0.00
16 Hexaware Technologies Limited   201.4 61.01B 24.26 15.9 0.00
17 ICRA Limited   3972 39.88B 12.06 31.04 0.00
18 WIM Plast Ltd   1500 18.01B 17.84 22.41 0.00
19 CMC Limited (Parent)   2034.35 61.51B 23.26 14.87 0.00
20 SQS India BFSI Ltd   725.9 7.71B 26.08 20.85 0.00
21 Castrol India Limited   389.75 193.01B 3.82 29.52 0.00
22 Wabco India Ltd   5200.15 98.69B 15.55 15.61 0.00
23 Sinclairs Hotels Limited   277.2 1.54B 21.11 42.62 0.00
24 Gillette India Limited   4218.55 137.85B 10.95 18.59 0.00
25 Sangam Advisors Ltd   27.1 267.03M 28.74 49.31 0.00
26 Akzo Nobel India Ltd   1415 66.20B 20.1 11.42 0.00
27 VST Industries Limited   2429 37.52B 8.72 26.26 0.00
28 Hasti Finance Ltd   9.85 106.77M 56.28 41.46 0.00
29 Balmer Lawrie Investments Ltd.   374.9 8.40B 8.6 97.92 0.00
30 TTK Prestige Limited (Parent)   5662.6 66.20B 14.84 12.28 0.00
31 FAG Bearings India Limited   3890 64.05B 10.64 17.37 0.00
32 Stovec Industries Ltd   2055 4.29B 22.01 17.11 0.00
33 Ramco Systems Ltd   372.1 11.24B 17.02 16.6 0.00
34 Atul Auto Ltd   438.25 9.66B 21.32 14.13 0.00
35 Panasonic Carbon India Co Ltd   470.85 1.19B 16.97 35.56 0.00
36 TV Today Network Ltd.   276.8 16.45B 13.23 17.63 0.00
37 Monsanto India Limited   2266 39.13B 8.31 21.52 0.00
38 Fervent Synergies Ltd   29.95 876.04M 22.58 23.64 0.00
39 Yamini Investments Company Ltd   23.8 12.37B 260.19 6.11 0.00
40 Tata Investment Corporation Limited   576.25 31.79B 0.25 92.75 0.00
41 Multibase India Ltd   289.1 3.63B 13.31 21.55 0.00
42 Vesuvius India Ltd   1165 23.98B 9.72 18.39 0.00
43 Bayer CropScience Ltd   4127.1 145.44B 6.21 15.99 0.00
44 Ultramarine & Pigments Ltd.   169.5 4.95B 13.33 19.07 0.00
45 ACC Ltd   1335.2 249.87B 6.72 12.78 0.00
46 NBCC (India) Ltd   251.15 150.54B 13.27 5.97 0.00
47 G M Breweries Ltd   480.5 7.06B 9.19 23.04 0.00
48 Zydus Wellness Ltd   872.95 34.14B 4.95 21.72 0.00
49 Pyxis Finvest Ltd   26 299.07M 12.56 72.03 0.00
50 Benares Hotels Ltd   1095 1.42B 12.53 27.7 0.00
51 Reliance Industrial Infrastructure Ltd.   400.65 6.05B 9.87 21.48 0.00
52 Modi Udyog Ltd   299.8 9.03B 580.89 2.49 0.00
53 Elantas Beck India Ltd   1765.1 14.00B 6.49 21.26 0.00
54 Merck Limited   978.95 16.28B 12.91 11.6 0.00
55 Vedvaag Systems Ltd   79.15 1.13B 36.54 13.42 0.00
56 ABM Knowledgeware Ltd   151.6 3.02B 7.95 28.14 0.00
57 D Link India Ltd   119.25 4.25B 41.29 5.28 0.00
58 Indag Rubber Ltd   183.65 4.87B 11.01 17.73 0.00
59 Trigyn Technologies Ltd   108.05 3.21B 21.67 10.83 0.00
60 VST Tillers Tractors Limited   1805.7 15.63B 8.64 15.68 0.00
61 National Aluminium Company Limited   65.05 125.83B 2.39 13.76 0.00
62 Dhanleela Investments & Trading Co Ltd   63.95 3.03B 163.6 3.6 0.00
63 Whirlpool Of India Ltd.   920 116.91B 5.25 11.26 0.00
64 Indian Toners & Developers Ltd   132.4 1.05B 12.32 20.61 0.00
65 Shanthi Gears Ltd.   114.4 9.58B 2.3 18.53 0.00
66 Divyashakti Granites Ltd   102 1.04B 14.2 15.22 0.00
67 Rap Media Ltd.   7.67 45.11M 22.83 12.57 0.00
68 Wendt India Ltd.   1775 3.55B 7.9 16 0.00
69 Rubfila International Ltd   37.9 1.64B 15.7 8.46 0.00
70 Saint-Gobain Sekurit India Limited   46.55 4.23B 8.4 13.35 0.00
71 Ingersoll Rand India Limited   678.9 21.47B 5.98 7.65 0.00
72 Fortis Malar Hospitals Ltd   85.2 1.57B 9.18 14.84 0.00
73 Amba Enterprises Ltd   120.45 1.52B 19.44 3.52 0.00
74 Kirloskar Oil Engines Ltd   332 48.02B 0.27 9.77 0.00
75 Indbank Merchant Banking Services Ltd   14.62 647.33M 2.27 23.7 0.00
76 Dolat Investments Ltd   2.64 464.64M 18.04 4.21 0.00
77 Kennametal India Limited   575 12.65B 2.37 8.19 0.00
78 Kirloskar Pneumatic Company Ltd   725 9.31B 0.69 11.6 0.00
79 Walchand Peoplefirst Ltd   147.9 416.27M 12.13 9.97 0.00
80 Novartis India Limited   683.05 19.19B 1.48 6.33 0.00
81 Shilchar Technologies Ltd   435 1.66B 1.69 16.12 0.00
82 UP Hotels Ltd.   297.7 1.62B 5.56 11.98 0.00
83 Alufluoride Ltd   32.3 223.95M 12.09 8.31 0.00
84 Panasonic Energy India Co Ltd   283 2.13B 6.41 7.83 0.00
85 Voltamp Transformers Limited   916.5 9.23B 1.02 7.77 0.00
86 Danlaw Technologies India Limited   55.75 212.01M 11.01 8.15 0.00
87 Mount Everest Mineral Water Ltd.   102 3.47B 3.76 5.71 0.00
88 Mindteck (India) Ltd   94.85 2.39B 5.29 5.07 0.00
89 IVP Ltd   122.7 1.29B 3.51 9.31 0.00
90 Caprihans India Limited   100.8 1.32B 5 6.05 0.00
91 Insilco Ltd   27.2 1.68B 2.48 2.93 0.00
92 Gujarat Intrux Ltd   58.95 191.86M 7.91 2.82 0.00
93 Hardcastle & Waud Manufacturing Co Ltd   280 190.25M 0.58 10.92 0.00
94 Pranavaditya Spinning Mills Ltd   27.9 515.47M 4.36 1.12 0.00
95 Elegant Marbles & Granite Industries Ltd   100.5 453.17M 3.51 3.49 0.00
96 Zodiac JRD MKJ Ltd   36.05 198.98M 2.2 4.53 0.00


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41 Comments on "Debt Free Companies in India 2017"

  1. 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

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

  3. 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

  4. Good work

  5. 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

  6. Its so informative ji.

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

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

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

  10. 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.

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

  12. 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.

  13. 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!

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

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

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

  16. 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

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

  18. 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

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

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

  21. excellent

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

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

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

    Very useful,information, compiled with deligence. Thanks

  25. VERY GOOD

  26. 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.

  27. 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.

  28. awesome analysis

  29. good information about debt free company

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

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

  31. 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.

  32. Good one

  33. I like zero debt free company

  34. 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

  35. 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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