The debt-to-equity ratio is a significant metric to consider when investing in companies. The debt-to-equity ratio assesses the amount of capital raised for the operation of a company. In addition, it indicates a company’s stability and ability to raise additional money in order to grow.
Here are two multibagger micro-cap stocks with the zero debt-to-equity ratio
Selan Exploration Technology Ltd.
Selan Exploration Technology Ltd specialises in oil exploration and production and the company is involved in hydrocarbon, oil, and gas exploration.
As of FY23, the company reported a debt-to-equity ratio of zero and it is a micro-cap company with a market capitalization of Rs 522 crore.The company’s shares were trading at Rs 343.85 per share, down 1.67 percent on July 13 from the previous trading session.
In the past year, the company’s share price increased from Rs 162.05 to current levels, giving multibagger returns of 113 percent. Therefore, if an investor purchased 1 lakh company shares in the previous year, their holdings would now be worth 2.13 lakhs!
As per company financials, Operating revenues significantly increased by 52 percent from Rs 77 crore during FY 21-22 to Rs 117 crore in FY 22-23. Keeping the same time frame, Net profit numbers have significantly increased by 233 percent, from Rs 9 crore to Rs 30 crore.
Asian Energy Services Ltd.
Asian Oil Field Services Limited offers exploration services to Indian oil and gas industries.It is one of the few companies that provide complete upstream oil services.
As of FY23, the company had a debt-to-equity ratio of 0.1 and it is a micro-cap company with a market capitalization of Rs 543 crore.On July 13, the company’s shares were trading at Rs 142.65 a share.
The company’s share price climbed from Rs 55 to current values in the previous four months, yielding multibagger returns of 159 percent. As a result, if an investor bought 1 lakh firm shares four months ago, their holdings would now be worth 2.59 lakhs!
According to company financials, operating revenues fell by 58 percent from Rs 260 crore in FY 21-22 to Rs 109 crore in FY 22-23. In the same time frame, net profit has dropped by 218 percent, from Rs 38 crore to a loss of Rs 45 crore.
Written by Omkar Chitnis
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