In the stock market, small-cap companies often go unnoticed compared to larger, well-known firms. However, some of these smaller businesses are in great financial health,  especially those with no debt. Being debt-free means they can use their earnings for growth instead of paying interest, making them attractive to long-term investors.

When these debt-free small-cap stocks are trading at a discount, it means their current market price is significantly lower than their estimated true value. This presents a potential buying opportunity for investors looking for value picks and for strong future returns.

Here is the list of stocks to look out for

Finolex Cables Ltd

Finolex Cables is a leading manufacturer of electrical and communication cables in India. The company also produces switches, LED lights, and fans, serving both industrial and household segments.

With a market capitalization of Rs. 12,846.90 Crores, the shares of Finolex Cables Ltd have declined almost 51 percent from an all-time high of Rs. 1,700 to the current market price of Rs. 840.00.

The company maintains a strong financial position with a debt-to-equity ratio of 0, indicating it is debt-free. It delivers a healthy Return on Equity (ROE) of 13.4% and a solid Return on Capital Employed (ROCE) of 17.6%, reflecting efficient capital utilization and profitability.

Voltamp Transformers Ltd

Voltamp Transformers is a key player in the Indian power sector, specializing in manufacturing power and distribution transformers. It serves various industries, including power generation, transmission, and distribution companies, with a focus on quality and reliability.

With a market capitalization of Rs. 8,065.77 Crores, the shares of Voltamp Transformers Ltd have declined almost 46 percent from an all-time high of Rs. 14,800 to the current market price of Rs. 7972.40.

The company maintains a strong financial position with a debt-to-equity ratio of 0, indicating it is debt-free. It delivers a healthy Return on Equity (ROE) of 21.7% and a solid Return on Capital Employed (ROCE) of 29.1%, reflecting efficient capital utilization and profitability.

Cello World Limited

Cello World is a prominent Indian consumer products company, known for its wide range of products, including kitchenware, stationery, and household plastic goods. The company enjoys strong brand recall and a broad market reach in both urban and rural areas.

With a market capitalization of Rs. 12,450.18 Crores, the shares of Cello World Ltd have declined almost 45 percent from an all-time high of Rs. 1,024.50 to the current market price of Rs. 563.65.

The company maintains a strong financial position with a debt-to-equity ratio of 0, indicating it is debt-free. It delivers a healthy Return on Equity (ROE) of 20.4% and a solid Return on Capital Employed (ROCE) of 23.7%, reflecting efficient capital utilization and profitability.

VST Industries Ltd

VST Industries is a Hyderabad-based company involved in the manufacturing and sale of cigarettes and tobacco products. It is one of the oldest cigarette manufacturers in India and is an associate of British American Tobacco.

With a market capitalization of Rs. 4,737.43 Crores, the shares of VST Industries Ltd have declined almost 43 percent from an all-time high of Rs. 486.15 to the current market price of Rs. 278.90.

The company maintains a strong financial position with a debt-to-equity ratio of 0, indicating it is debt-free. It delivers a healthy Return on Equity (ROE) of 16.5% and a solid Return on Capital Employed (ROCE) of 20.8%, reflecting efficient capital utilization and profitability.

Rites Limited

RITES (Rail India Technical and Economic Service) is a government-owned engineering consultancy company specializing in transport infrastructure. It provides services in railways, highways, urban transport, and export of rolling stock, with a strong domestic and international presence.

With a market capitalization of Rs. 11,899.75 Crores, the shares of Rites Limited have declined almost 40 percent from an all-time high of Rs. 413 to the current market price of Rs. 247.60.

The company maintains a strong financial position with a debt-to-equity ratio of 0, indicating it is debt-free. It delivers a healthy Return on Equity (ROE) of 14.7% and a solid Return on Capital Employed (ROCE) of 20.8%, reflecting efficient capital utilization and profitability.

Concord Biotech Ltd

Concord Biotech is a biopharmaceutical company engaged in the manufacturing of fermentation-based APIs, especially immunosuppressants. It caters to global pharmaceutical companies and has strong R&D capabilities and regulatory accreditations.

With a market capitalization of Rs. 17,148.17 Crores, the shares of Concord Biotech Ltd have declined almost 38 percent from an all-time high of Rs. 2,658 to the current market price of Rs. 1639.15.

The company maintains a strong financial position with a debt-to-equity ratio of 0, indicating it is debt-free. It delivers a healthy Return on Equity (ROE) of 22.3% and a solid Return on Capital Employed (ROCE) of 29.5%, reflecting efficient capital utilization and profitability.

Written by Sridhar J 

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