How to find debt free companies in India using Screener website?
Debt is a very important factor to check while investing in any company.
While zero debt on a company validates its financial health, on the other hand, a heavy debt on the company can be taken as a sign to stay away from it.
Huge debt restricts a company from expanding and decreases profits.
A low debt company can enjoy higher profit margin and higher solvency. On the contrary, high debt companies have to pay high interests and hence have a higher cost of capital.
Few of the debt free companies in India are Maruti Suzuki, ITC, Hero motocorp, Titan company etc.
In this post, I’m going to explain how you can find the debt free companies in India using screener website. Moreover, you will learn this within 2 minutes and step-by-step.
Firstly, I wanted to give just the names of debt free companies in India in this post. However, then I realized that this list might change as the companies may take debts in future. Hence, it’s better to teach you how to find the debt free companies in India than just to give names.
Nevertheless, there is a list of these debt-free companies in the last section of this post.
Once you have found the debt free company, you can analyze it further to check its financial and economic health before investing.
However, here is what you need to know first before we start:
Debt to equity ratio:
The debt-to-equity ratio measures the relationship between the amount of capital that has been borrowed (i.e. debt) and the amount of capital contributed by shareholders (i.e. equity).
Debt to Equity Ratio =(Total Liabilities)/(Total Shareholder Equity)
Generally, as a firm’s debt-to-equity ratio increases, it becomes riskier.
A lower debt-to-equity number means that a company is using less leverage and has a stronger equity position.
As a thumb of rule, companies with the debt-to-equity ratio more than 1 are risky and should be considered carefully before investing.
How to find debt free companies in India using Screener?
Here is exactly what you need to do to find the list of debt free companies in India using Screener website:
1. Go to the screener.
2. Login with your credentials (email id and password)
3. Scroll down to find the query builder.
4. In the query builder, write the following:
Debt to Equity = 0
5. Run the query
6. You will get the list of all the debt-free companies in India.
Further, you can also customize this search.
For example, if you want to find the large-cap companies (with market capitalization > 50,000 crores) and debt to equity ratio less than 0.5, you can write the following in query builder:
Debt to equity < 0.5 AND
Market capitalization > 50000
This will give you the list of all the large-cap companies with D/E ratio < 0.5
Note: You can also use various other financial ratios like PE, P/BV, ROE, PEG etc in the same query builder to filter companies. I’ll teach to do it in another blog post.
List of large cap debt free companies in India:
That’s it. This is all you need to do to find the debt free companies in India. Isn’t it simple?
I hope this post is useful to the readers. Please comment below if you have any questions.
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Hi, I am Kritesh (Tweet me here), an NSE Certified Equity Fundamental Analyst and an electrical engineer (NIT Warangal) by qualification. I have a passion for stocks and have spent my last 4+ years learning, investing and educating people about stock market investing. And so, I am delighted to share my learnings with you. #HappyInvesting