A company’s market capitalization is crucial for investors to estimate its potential and inherent risks. Mid-cap companies have evolved from small-cap and have the potential to become large-cap. Midcap stocks are riskier than large caps or small caps but provide larger returns. They also have less competition when it comes to purchasing discounted shares.
Mid-cap firms with good financials, such as a low debt-to-equity ratio, high earnings growth, and stable cash flow, are considered fundamentally robust.
Here are the 3 mid-Cap stocks that lowered their debt in 3 years
Astral Ltd
The company is one of the leading manufacturers of pro-India plumbing and drainage systems in the country such as plastic pipes, and adhesives products.
The company’s debt has reduced consistently at a rate of 54.3% from ₹ 191 Crores in FY20 to ₹ 87.1 Crores in FY23. In fact, its net profit grew at a CAGR of 13.55 % from ₹ 250 crores in FY20 to ₹ 472 Crores in FY23.
In the past five years, the company’s share price also increased from ₹ 419 to ₹ 1,685.30 giving multibagger returns of 301.70%. With a market capitalization of ₹ 45,295 crores, Astral is a mid-cap company. It has a return on equity of 16.84 % and a debt-to-equity ratio stood at 0.03 as of FY23. It is a high-growth stock and its shares were trading at a price-to-earnings ratio of 101, which is higher than the industry average of 29.4.
Dalmia Bharat Ltd
Dalmia Bharat is engaged in the business of manufacturing and selling cement. The company was started in 1939 and is the 4th largest cement manufacturer by installed capacity in India.
The company’s debt has reduced consistently at a rate of 36.2% from ₹6,049 Crores in FY20 to ₹3,855 Crores in FY23. In fact, its net profit grew at an impressive CAGR of 35.30 % from ₹ 238 crores in FY20 to ₹ 1,079 Crores in FY23.
In the past five years, the company’s share price also increased from ₹ 995.50 to ₹ 2,069.00, giving multi bagger returns of 107.85%. With a market capitalization of ₹ 38,792 crores, Dalmia Bharat is a mid-cap company. It has a return on equity of 6.62 % and a debt-to-equity ratio stood at 0.24 as of FY23. and its shares were trading at a price-to-earnings ratio of 33.6, which is higher than the industry average of 23.6.
Colgate-Palmolive (India) Ltd
Colgate-Palmolive India Ltd is engaged in the manufacturing/ trading of toothpaste, toothpowder, toothbrush, mouthwash, and personal care products. and it is the largest oral care company in India.
The company’s debt has reduced consistently at a rate of 32% from ₹ 101.50 Crores in FY20 to ₹ 68.96 Crores in FY23. In fact, its net profit grew at a CAGR of 5.11 % from ₹ 816 crores in FY20 to ₹ 1,047 Crores in FY23.
In the past five years, the company’s share price also increased from ₹ 1,222 to ₹ 1,634 giving a return of 33.8%. With a market capitalization of ₹ 44,503 crores, Colgate Palmolive is a mid-cap company. It has a return on equity of 61% and has zero debt-to-equity ratio as of FY23. The company has more than 50% market share in the toothpaste category and its shares were trading at a price-to-earnings ratio of 42.2, which is lower than the industry average of 56.9.
Written by Omkar C
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