Fundamentally strong companies possess strong financials, such as a low debt-to-equity ratio, considerable profit growth, and consistent cash flow. Those company’s have capability to survive in market downturns and emerge stronger.
A debt-free firm indicates that the company has no debt or external borrowing.A debt-free firm is one that is entirely self-sufficient and does not have any outstanding loans.
Here are three debt-free small-cap stocks over the previous five years.
Bhansali Engineering Polymers Ltd.
Bhansali Engineering Polymers Ltd is a vertically integrated petrochemical company in India.That manufactures ABS (Acrylonitrile Butadiene Styrene) resins and their alloys with other polymers.
Bhansali Engineering belongs to the small-cap category, with a market capitalisation of Rs 2,128 crore. On July 28, shares were trading at Rs 85.55 a share, down 0.70 percent from the previous close price.The stock has risen 24 percent in the previous six months and 20 percent in the last year.
The company has had a debt-to-equity ratio of zero over the last five years. The company’s return on equity (ROE) and net profit margin have significantly dipped, which stands at 12.80 percent and 9.97 percent, respectively.
Bhansali Engineering reported a 13 percent decrease in sales to Rs 294 crore in Q1FY24, compared to Rs 337 crore in the previous year’s equivalent quarter (Q1FY23), but its net profit increased to Rs 50 crore in Q1FY24, from Rs 47 crore in Q1FY23.
Alembic Ltd.
Alembic Limited is engaged in production of tinctures and alcohol and also involved in manufacturing of active pharmaceutical ingredients.
With a market capitalization of Rs 2,109 crore, the firm belongs to the small cap category. Shares were trading at Rs 82.20 apiece, up 4.98 percent on July 28 from the previous close price.
Over the previous five years, the firm has had a debt-to-equity ratio of zero. Return on equity (ROE) and return on capital employed (ROCE) for the firm have grown slightly to 9.17 percent and 4.61 percent, respectively.
The stock has risen 22 percent in the previous six months and 18 percent in the last year.
Company’s revenue climbed by 63 percent yearly, rising from Rs 78 crore in FY 21-22 to Rs 127 crore in FY 22-23. Net profit declined by 7 percent, from Rs 86 crore to Rs 80 crore.
Lakshmi Machine Works Ltd.
Lakshmi Machine Works Ltd is an Indian textile machinery manufacturer that produces and sells textile spinning machines, CNC machine tools, heavy castings, and its components.
The company belongs to the small-cap category, with a market capitalisation of Rs 14,795 crore. On July 28, shares were trading at Rs 13,861 apiece, up 0.51 percent from the previous close price.The stock has risen 27 percent in the previous six months and 37 percent in the last year.
The company has had a debt-to-equity ratio of zero over the last five years. The company’s return on equity (ROE) and Return on capital employed(ROCE) have significantly increased, which stands at 16.42 percent and 19.08 percent, respectively.
Lakshmi Machine Works reported revenue climbed by 49 percent yearly, rising from Rs 3,170 crore in FY 21-22 to Rs 4,719 crore in FY 22-23. Net profit increased by 112 percent, from Rs 181 crore to Rs 384 crore.
Written by Omkar Chitnis
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
