Synopsis:
Debt-free stocks like Gillette India Ltd and BSE Ltd and three more stand out with ROCE above 40%, reflecting strong financial health, efficient capital use, and consistent profitability making them attractive picks for long-term investors seeking quality and stability.
Investors often look for debt-free companies with a Return on Capital Employed (ROCE) above 40% as they indicate strong financial health, efficient capital utilization, and sustainable profitability. Such companies typically operate efficiently without relying on borrowed funds, reflecting robust business models, strong cash flows, and prudent management practices that ensure long-term financial stability and sustainable growth.
The defense, capital market, electronics manufacturing, FMCG, and education services sectors feature several debt-free companies with a ROCE above 40%. These sectors reflect strong financial discipline, efficient capital utilization, and stable business models that drive consistent performance without dependence on borrowed funds.
RRP Defense Ltd
RRP Defense Ltd, formerly known as Euro Asia Exports Ltd, is an Indian company focused on the defense and drone technology sector. It is developing capabilities in unmanned aerial systems, electro-optics, and drone manufacturing. The company has partnered with international firms to manufacture drone components in India, aiming for both domestic and export markets.
With market capitalization of Rs. 1,323 cr, the shares of RRP Defense Ltd are closed at Rs.964 per share, from its previous close of Rs. 974.60 per share. The stock has delivered 30% return in the past year.
The company is debt-free and demonstrates exceptional financial efficiency, with a ROCE of 82.7% and ROE of 87.0%, supported by a strong 3-year average ROE of 52.7%. Additionally, Promoter holding has risen to 74.65%.
BSE Ltd
BSE Ltd, formerly known as the Bombay Stock Exchange, is Asia’s oldest stock exchange and one of India’s premier financial market institutions. It provides trading platforms for equities, derivatives, debt instruments, and mutual funds, and also operates India INX, an international exchange at GIFT City.
With market capitalization of Rs. 1,16,450 cr, the shares of BSE Ltd are closed at Rs. 2,855 per share, from its previous close of Rs. 2,895.50 per share. The stock has delivered 82% return in the past year.
The company has no debt on its books and demonstrates strong financial efficiency, with a Return on Capital Employed (ROCE) of 46.6% and a Return on Equity (ROE) of 36.0%. It also has an impressive three-year average ROE of 30%
Shilchar Technologies Ltd
Shilchar Technologies Ltd is an Indian manufacturer specializing in transformers and electronic components. The company serves sectors such as power distribution, renewable energy, and electronics, with a growing focus on exports and high-efficiency transformer solutions for domestic and global markets.
With market capitalization of Rs. 4,849 cr, the shares of Shilchar Technologies Ltd are closed at Rs. 4,239.30 per share, from its previous close of Rs. 4,278.25 per share. The stock has delivered a negative return of 16% in the past year.
The company is debt-free and has showcased exceptional financial performance, with a Return on Capital Employed (ROCE) of 71.3% and a Return on Equity (ROE) of 52.9%. It maintained a strong ROE track record, averaging 51.9% over the past three years.
Gillette India Ltd
Gillette India Ltd, a subsidiary of Procter & Gamble (P&G), is a leading FMCG company known for its shaving and grooming products. Its popular brands include Gillette, Venus, and Oral-B. The company has a strong presence in the male grooming segment and maintains robust brand loyalty across India.
With market capitalization of Rs. 26,934.94 cr, the shares of Gillette India Ltd are closed at Rs. 8,266 per share, from its previous close of Rs. 8,405.55 per share. The stock has delivered a negative return of 10% in the past year.
The company is debt-free and demonstrates strong financial performance with a Return on Capital Employed (ROCE) of 56.1% and a Return on Equity (ROE) of 41.6%. It has maintained a solid ROE track record, averaging 38.6% over the past three years, and continues to reward shareholders with a healthy dividend payout ratio of 81.0%.
Crizac Ltd
Crizac Ltd is an Indian company engaged in providing educational consultancy and career development services, primarily focused on overseas education. It partners with global universities and institutions to facilitate student placements and supports academic collaborations, offering end-to-end guidance for higher education abroad.
With market capitalization of Rs. 4,709.65 cr, the shares of Crizac Ltd are closed at Rs. 269.15 per share, from its previous close of Rs. 276.60 per share. The stock has delivered a negative return of 13% since its listing.
The company is debt-free and reflects strong financial efficiency with a Return on Capital Employed (ROCE) of 47.9% and a Return on Equity (ROE) of 36.2%. It also has an impressive three-year average ROE of 49.4%, highlighting its consistent ability to generate healthy returns for shareholders.
Written by Manideep Appana
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