The telecom sector in India has grown rapidly in the last few years. With the recent launch of 5G, digital technologies have made a big impact on the country’s economy and directional growth of the said sector at the same time.
As much as these companies under the telecom sector are growing, it is important for them to maintain low debt to avoid future losses and bankruptcies. Debt to equity ratio of a company is a comparison of its total debt to its total assets. It can be easily calculated by dividing a company’s debt by its shareholders equity.
Here are three small cap telecom stocks which are almost debt- free:
Share price of Railtel closed at Rs. 221.35 per share and jumped up to 5% to reach its intra- day high of Rs. 222.55 per share. The stock gained 21.15% in the last one month and 99.57% in the last six months.
Railtel Corporation is a public sector enterprise under the Ministry of Railways, Government of India. The company offers broadband and VPN services such as HD video conferencing, data center, RailWire broadband, leased line, virtual private network, cyber security, and many others.
Comparing its recent financials on a QoQ basis, the company has recorded a reduction of 33.5% in its revenues from Rs. 703.63 crore in Q4FY23 to Rs. 467.61 crore in Q1FY24.
Its net profit which was Rs. 76.04 crore in Q4FY23 decreased 49.5% to Rs. 38.39 crore in Q1FY24. It has a low price to earnings ratio of 34.44 against its industry average of 84.48. The company maintains a low debt to equity ratio of 0.
Share price of Hathway closed at Rs. 19.30 per share and gained more than 6% to reach Rs. 21.15 per share. The stock returned 17.06% in the last one month and 45.26% in the last six months.
Controlled by Mukesh Ambani Group, Hathway Cable and Datacom offers its services in the Cable TV and broadband segment. It is India’s leading service provider for cable broadband. The company offers its cable TV services in more than 100 cities and high-speed cable broadband services in more than 15 cities.
As per the company’s recent financials performance, it recorded an increase of 8.6% in its revenues from Rs. 459.59 crore in Q4FY23 to Rs. 499.23 crore in Q1FY24.
Its net loss of Rs. 14.62 crore in Q4FY23 turned out to be a net profit of Rs. 22.36 crore in Q1FY24. It has a low price to earnings ratio of 47.9 against its industry average of 84.48. The company maintains a low debt to equity ratio of 0.
Share price of Avantel closed at Rs. 215.60 per share and gained up to 3% to reach Rs. 223.90 per share. The stock gave a multibagger return of 176.9% in the last six months and 288.13% in the last one year.
Avantel is engaged in manufacturing and selling of telecom related products and services. It offers various software solutions, satellite communications solutions, network management and radar systems, and many others. The company was established in the year of 1990.
Comparing the company’s financial performance on a QoQ basis, it recorded a revenue of Rs. 68.95 crore in Q1FY24 which is an increase of 31.2% from Rs. 52.53 crore in Q4FY23.
Its net profit of Rs. 9.69 crore in Q4FY23 decreased 17.3% to Rs. 8.01 crore in Q1FY24. It has a good average ROE for the last three years of 30.71. The company maintains a low debt to equity ratio of 0.26.
Written by Bhumika Khandelwal
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