Companies generally manage their capital requirements with the help of equity or through internally generated cash. However, they may also use debt for the same. While debt provides financial leverage to companies, too much of it can cause trouble.
Debt-free companies send a signal to investors that they are able to manage their funding requirements primarily through cash. During an economic slowdown, companies with no debt or very little debt do not have to worry about falling sales and payment of fixed interest.
Here are a few multibagger debt-free mid-cap stocks to add to your watchlist:
Lloyds Metals and Energy
Lloyds Metals and Energy is in the business of manufacturing sponge iron, power generation and mining activities. It is a mid-cap stock with a market capitalization of ₹ 25,858 crores and has a debt-to-equity ratio of 0.00.
As per data available on the Bombay Stock Exchange (BSE), the company’s share price increased from ₹ 156.10 to ₹ 567.00 in a span of one year, delivering multibagger returns of 263 percent. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 3.63 lakhs today!
Mazagon Dock Shipbuilders
Mazagon Dock Shipbuilders has evolved into a renowned shipbuilding company. It has constructed 801 vessels since 1960, including warships, submarines, cargo/passenger ships, and offshore platforms. It is a mid-cap stock with a market capitalization of ₹ 45,807 crores and has a debt-to-equity ratio of 0.00.
In the past year, the company’s share price increased from ₹ 424.85 to ₹ 2073.45, delivering multibagger returns of 388 percent. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 4.88 lakhs today!
BSE
Bombay Stock Exchange (BSE) is an Indian Stock Exchange that facilitates a market for trading in equity, currencies, debt instruments, derivatives, and mutual funds. It is a mid-cap stock with a market capitalization of ₹ 18,520 crores and has a debt-to-equity ratio of 0.00.
In the past six months, the company’s share price increased from ₹ 439.65 to ₹ 1294.35, delivering multibagger returns of 194 percent. Therefore, if an investor had invested ₹ 1 lakh in the company’s shares six months ago, the value of their holdings would have been ₹ 2.94 lakhs today!
Written by Simran Bafna
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