One of the most important parameters to judge the performance of the company is to watch how the debt scenario of the company is and how leverage is managed by the same. Keeping the advantages of debt financing aside, it is important to note how it affects the operational numbers over the years. Moving further, ‘Penny’ stocks with a nil debt-to-equity ratio are something to watch out for.
Listed below are 3 such Penny stocks that have zero debt-to-equity ratio:
Coral India Finance & Housing Limited
Coral India Finance & Housing Limited is a housing development company in India. It is broadly engaged in two segments which are construction, development & maintenance of properties & other related services, and investment services. A majority of the company’s revenue is derived from the ‘Investment’ segment. The company has a market capitalization of Rs 131 crores and a ‘nil’ debt-to-equity ratio.
Digging into the financials of the company, the revenues as well as net profits have increased in recent quarters with the former increasing from Rs 4 crores in Q2 to Rs 11 crores in Q3 and the latter moving from Rs 3 crores to Rs 7 crores during the same period.
The basic profitability metrics such as the ROE and ROCE have improved consistently in the past 3 financial years with the most recent shift in ROE from 10.63 percent during FY20-21 to 12.91 percent in FY21-22 and ROCE, keeping the timeframe the same, moved from 12.87 percent to 16.34 percent.
Pasupati Acrylon Limited
Pasupati Acrylon Limited, operating in the textile industry, has various segments including the ‘Acrylic Fibre’ Division, etc. The product portfolio offered by the group comprises Soft Feel Fiber, Hydrophilic Fiber, Metalized CPP, etc. The company has a market capitalization of Rs 276 crores and a ‘nil’ debt-to-equity ratio for the past 2 financial years.
Having a look at the financials of the company, the revenues, on one hand, have reduced from Rs 207 crores in Q2 to Rs 193 crores in Q3, and the PAT figures, on the other hand, have moved up from Rs 4 crores to Rs 11 crores during the same period.
The basic profitability metrics such as the ROE and ROCE have showcased a downward pattern with ROE shifting from 20.33 percent during FY20-21 to 17.89 percent in FY21-22 and ROCE, keeping the timeframe the same, moved down from 28.6 percent to 25.3 percent.
Rajoo Engineers Limited
Rajoo Engineers Limited is engaged in the process of manufacturing and selling post-extrusion equipment and plastic processing machinery. Products and solutions offered
by the company include Downward Extrusion Blown Film Lines, Monolayer Blown Film Lines, etc and are applied for the purpose of agriculture, automobiles, pharmaceuticals, printing, etc. The company has a market capitalization of Rs 200 crores and a ‘nil’ debt-to-equity ratio since the past financial year.
Digging into the standalone financials of the company, the revenues have increased from Rs 34 crores in Q2 to Rs 37 crores in Q3. On a contrasting note, the net profit figures marginally moved down from Rs 2.33 crores to Rs 2.31 crores during the same period.
The basic profitability metrics such as the ROE and ROCE have improved consistently in the past 3 financial years with the most recent shift in ROE from 14.23 percent during FY20-21 to 17.16 percent in FY21-22 and ROCE, keeping the timeframe the same, moved from 20.15 percent to 22.99 percent.
Investment in Penny stocks may contain exposure to various kinds of risks. It is advised to invest in such stocks with prior analysis of the financials and consultations with your investment advisor.
Written by Amit Madnani
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