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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 June’2017)

SL Name Market Price (Rs.) Market Cap (Rs.Million) P/E Ratio Revenue (Rs.Million) Net Profit margin (TTM) Total Debt to Equity
1 GlaxoSmithkline Healthcare 5,360.00 225,530.00 34.34 54800 14.85 0.00
2 Larsen & Toubro Infotech 800.70 137,160.00 14.34 65010 14.93 0.00
3 Hexaware Technologies 250.85 74,510.00 17.11 36750 12.16 0.00
4 Thyrocare Technologies Ltd 744.25 40,070.00 56.52 3070 23.13 0.00
5 V I P Industries 193.60 27,500.00 32.79 12750 6.58 0.00
6 Jindal South West 1,715.00 18,970.00 39.35 618.17 74.79 0.00
7 Automotive Axles 733.00 11,130.00 22.91 11470 4.24 0.00
8 Nucleus Software Exports Ltd 336.00 10,860.00 17.27 3720 16.84 0.00
9 Atul Auto Ltd 419.95 9,230.00 24.73 4750 7.85 0.00
10 Marathon Nextgen Realty 306.00 8,820.00 10.58 1910 42.25 0.00
11 Bhansali Eng. Polymers 51.20 8,480.00 37.36 7040 4.94 0.00
12 HPC Biosciences Ltd 47.60 7,600.00 1.49K 27.43 22.48 0.00
13 OnMobile Global 65.80 6,880.00 51.43 7200 1.95 0.00
14 Pine Animation Ltd-BO 25.60 6,820.00 - 1.29 10.64 0.00
15 G M Breweries Ltd 436.00 6,340.00 14.45 3750 11.7 0.00
16 Goodricke Group 260.05 5,640.00 17.03 6830 4.85 0.00
17 Sai Baba Investment 459.25 5,170.00 700.79 15.63 47.07 0.00
18 Florence Investech 1,540.00 5,110.00 16.02 344.2 83.21 0.00
19 Hercules Hoists Ltd 156.25 5,010.00 83.44 741.64 8.09 0.00
20 Appu Marketing Manufacturing 329.75 4,810.00 5.09K 5.89 1.82 0.00
21 Anuh Pharma 180.35 4,510.00 25.61 2060 8.53 0.00
22 Fiberweb 330.10 4,420.00 24.13 1300 13.22 0.00
23 Pil Italica Lifestyle 15.85 3,620.00 36.92 649.12 14.08 0.00
24 D Link India Ltd 96.60 3,440.00 14.1 2040 3.38 0.00
25 Shree Global Tradefin 2.84 3,240.00 - 1320 -4.04 0.00
26 Cupid 289.95 3,230.00 15.71 829.3 24.77 0.00
27 Piramal Phytocare Ltd 74.00 1,950.00 1.03K 41.3 4.6 0.00
28 Dhanleela Inv. & Trading-BO 36.15 1,710.00 2.76K 6.45 9.61 0.00
29 Ideal Optics 108.00 1,580.00 714.01 67.62 4.7 0.00
30 James Warren Tea 129.00 1,550.00 25.49 1210 5.01 0.00
31 Kalpa Commercial Ltd 142.00 1,490.00 1.40K 95.57 2.02 0.00
32 TCI Ind 1,660.00 1,490.00 - 19.82 -11.94 0.00
33 Mangalam Industrial Fin 1.33 1,280.00 394.66 80.24 3.98 0.00
34 Binny Mills 344.95 1,100.00 293.04 136.39 4.13 0.00
35 Technvision Ventures 180.00 1,070.00 - 464.56 0.15 0.00
36 India Gelatine and Chemicals 105.80 994.52 34.77 758.6 3.77 0.00
37 Amrapali Fincap Pvt Ltd 70.00 940.80 207.06 495.75 1.18 0.00
38 Matra Kaushal Enterprise-BO 4.35 877.47 - 50.57 -0.55 0.00
39 Blue Circle Svcs 4.27 868.82 - 80.62 -1.57 0.00
40 Rajlaxmi Industries 2.85 841.86 - 13.28 0.02 0.00
41 Swadeshi Ind and Leasing 7.60 822.16 1.07K 258.1 0.3 0.00
42 Sahara One Media and Entertainment 38.00 817.95 - 28.87 -79.24 0.00
43 Narmada Gelatines 133.50 810.04 19.98 1140 3.57 0.00
44 Jupiter Infomedia 79.50 797.09 - 0.8 -130.9 0.00
45 Fervent Synergies 26.00 780.00 32.36 391.46 6.16 0.00
46 Supremex Shine Steels 23.75 749.08 - 1.41 -11.39 0.00
47 Toyam Industries 3.49 722.47 1.30K 293.72 0.19 0.00
48 Synergy Bizcon Ltd 57.10 703.76 547.25 772.32 0.17 0.00
49 Elegant Marbles and Grani Ind 150.00 675.00 10.83 282.18 22.09 0.00
50 Adhbhut Infrastructure Ltd 61.00 671.00 - 3.31 -78.01 0.00
51 Asya Infosoft 51.00 605.88 306.16 3.07 46.26 0.00
52 Tyche Ind 57.80 591.94 19.22 426.1 7.23 0.00
53 Zenith Fibres 128.90 570.04 10.64 521.43 10.27 0.00
54 Sagar Productions Ltd 13.80 553.96 135.83 50.47 8.08 0.00
55 SPS Finquest 120.00 540.68 11.34 48.98 135.41 0.00
56 Manvijay Development Co 78.25 507.06 8.32K 0.32 19.24 0.00
57 Panafic Industrials Ltd 5.70 468.11 350.77 7.82 18.83 0.00
58 Intellivate Capital Advisors 15.00 465.82 1.06K 1.33 33.08 0.00
59 Avance Tech 2.17 430.08 202.61 899.19 0.24 0.00
60 Welcast Steels 605.00 386.09 21.87 2190 0.81 0.00
61 Safal Herbs 3.79 379.00 5.26K 15.72 0.46 0.00
62 Daikaffil Chemicals India 61.90 371.40 11.99 259.93 11.93 0.00
63 Franklin Leasing and Finance 22.40 353.53 142.27 42.73 5.82 0.00
64 Indo Thai Securities Ltd 34.45 337.50 10.25 441.28 7.46 0.00
65 Prerna Infrabuild 27.25 326.95 25.27 228.12 5.63 0.00
66 Cni Research 2.79 320.30 269.05 20.45 5.53 0.00
67 Swagruha Infrastructure 4.67 320.12 638.85 2.05 24.23 0.00
68 Shree Hari Chemicals Export 66.30 289.45 - 1150 -1.6 0.00
69 Goyal Associates 5.52 259.10 - 1.41 -23.05 0.00
70 Baba Arts 3.17 245.36 347.97 6.48 15.5 0.00
71 ISL Consulting 20.00 241.20 85.56 804.83 0.61 0.00
72 Artech Power & Trading 16.15 239.65 - 10.07 -13.38 0.00
73 Olympic Oil Ind 74.90 213.76 3.74 12110 0.47 0.00
74 Prithvi Exchange India 34.95 192.22 9.04 89.55 23.68 0.00
75 Polychem 418.50 169.09 49.79 27.45 2.69 0.00
76 Sam Ind 13.32 147.70 13.86 102.73 10.36 0.00
77 Jain Studios Ltd 5.00 130.35 30.16 82.31 5.27 0.00
78 Rishabh Digha Steel and Allied Products 22.95 125.91 46.09 27.91 14.19 0.00
79 Nova Publications India 37.95 119.62 149.22 60.81 1.29 0.00
80 Aadhaar Ventures India 0.72 113.11 - 91.91 -1.33 0.00
81 Alka India 0.19 95.00 - 11.1 -316.82 0.00
82 Adinath Exim Resources 22.75 93.37 30.54 2.87 106.84 0.00
83 Addi Ind 7.21 77.84 22.22 1.53 224.77 0.00
84 Aurum Soft Systems 1.19 77.47 - 30.68 -4.2 0.00
85 EPIC Energy 6.51 46.95 - 195.3 -15.04 0.00
86 Rajdarshan Ind 13.50 45.43 - 12.23 12.66 0.00
87 Sowbhagya Media 3.85 42.08 21.68 60.02 3.27 0.00
88 Garware Marine Ind 7.04 40.59 - 8.79 -57.95 0.00
89 Standard Batteries 7.00 36.20 - 2.43 -21.15 0.00
90 Sawaca Business Machines 2.87 29.85 25.43 15.05 8.11 0.00
91 Pagaria Energy 4.39 19.10 184.14 16.66 0.61 0.00
92 Axon Finance Ltd 2.47 18.87 67.36 34.76 0.81 0.00
93 Sunitee Chemicals 0.20 10.40 - 10.1 -7.31 0.00
94 Koa Tools India Ltd 0.22 7.65 - 0.18 -3.32K 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

45 Comments on "Debt Free Companies in India 2017"

  1. V Nice info

  2. 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.

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

  4. 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

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

  6. 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

  7. Good work

  8. 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

  9. Its so informative ji.

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

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

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

  13. 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.

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

  15. 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.

  16. 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!

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

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

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

  19. 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

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

  21. 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

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

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

  24. excellent

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

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

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

    Very useful,information, compiled with deligence. Thanks

  28. VERY GOOD

  29. 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.

  30. 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.

  31. awesome analysis

  32. good information about debt free company

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

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

  34. 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.

  35. Good one

  36. I like zero debt free company

  37. 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

  38. 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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