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Financial stability with minimal debt exposure; Top 5 almost debt free companies in the NIFTY50 index

Upstox
By Upstox News Desk

4 min read | Updated on August 26, 2024, 16:30 IST

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SUMMARY

The article highlights five companies from the NIFTY50 index that have minimal or no debt, showcasing their financial stability. The list includes ITC Ltd, SBI Life Insurance Company Ltd, Maruti Suzuki India Ltd, Divi's Laboratories Ltd, and Cipla Ltd, all boasting positive year-to-date returns.

Stock list

ITC
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SBILIFE
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MARUTI
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DIVISLAB
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Financial stability with minimal debt exposure - Top 5 almost debt-free companies in the NIFTY50 index

Financial stability with minimal debt exposure - Top 5 almost debt-free companies in the NIFTY50 index

A company can enjoy long-term financial stability when there is little or no debt at all.Debt proves to be boon for businesses where the operations are highly capital intensive and thus help in creating high turnover as well. However, if the debt is not managed well it might eat into large part of profits as well. In fact, just a few publically traded firms have total debts of either none or close to zero. Here we brought you the top 5 almost debt free companies among the NIFTY50 index.

(The debt-to-equity ratio is a financial metric that compares a company's total debt to its shareholder equity. This ratio indicates how much debt a company uses to finance its operations relative to the value of shareholders' equity. It is calculated by dividing total liabilities by shareholders' equity. A higher ratio suggests a greater reliance on debt, while a lower ratio indicates less dependence on borrowing.)

ITC Ltd

Established in 1910, ITC is the largest cigarette manufacturer and seller in the country. ITC operates in five business segments at present — FMCG Cigarettes, FMCG Others, Hotels, Paperboards, Paper and Packaging, and Agri-Business.

The last traded price of ITC Ltd is ₹505.25. The company's market capitalisation is ₹6,32,715.01 crore. ITC Ltd has a debt-to-equity ratio of 0 and a total debt of ₹303 crore. The current ratio of the company is 2.05. The year-to-date (YTD) return for ITC Ltd is 7.83%.

Maruti Suzuki India Ltd

The company was established in 1981. A joint venture agreement was signed between the Government of India and Suzuki Motor Corporation (SMC), Japan in 1982. The principal activities of the company are manufacturing, purchase and sale of motor vehicles, components and spare parts.

The last traded price of Maruti Suzuki India Ltd is ₹12,257.30. The company's market capitalisation is ₹3,85,948.06 crore. Maruti Suzuki has a debt-to-equity ratio of 0 and a debt amounting to ₹119 crore. The current ratio is 0.72, with a YTD return of 19.34%.

SBI Life Insurance Company Ltd

SBI Life Insurance Company Ltd is engaged in the business of life insurance and annuity. It was started as a joint venture between the State Bank of India and BNP Paribas Cardif S.A.

SBI Life Insurance Company Ltd has a last traded price of ₹1,792.45. The market capitalisation is ₹1,79,603.00 crore. The debt to equity ratio stands at 0, and the company has no recorded debt. The current ratio is 1.7, and the YTD return is 25.16%.

Divi's Laboratories Ltd

Incorporated in 1990, Divis Laboratories Ltd manufactures and exports APIs, Intermediates and Nutraceutical ingredients

Divi's Laboratories Ltd has a last traded price of ₹4,890.95. The market capitalisation is ₹1,29,962.81 crore. The company has a debt to equity ratio of 0 and a debt of ₹3 crore. The current ratio for Divi's Laboratories is 7.57. The YTD return of the company is 25.02%.

Cipla Ltd

Cipla Ltd. engages in the manufacture and distribution of healthcare products and bulk drugs. It operates through the following segments: Pharmaceuticals and New Ventures. The Pharmaceuticals segment develops, manufactures, sells and distributes generic or branded generic medicines as well as active pharmaceutical ingredients.

The last traded price of Cipla Ltd is ₹1,586.15. The company's market capitalisation is ₹1,27,957.87 crore. Cipla Ltd has a debt-to-equity ratio of 0.02 and a total debt of ₹559 crore. The current ratio is 2.78. The YTD return for Cipla Ltd is 26.77%.

(The current ratio measures a company's ability to pay its short-term liabilities with its short-term assets. It is calculated by dividing current assets by current liabilities. This ratio helps assess a company's liquidity and its capability to meet short-term obligations. A ratio greater than one indicates that the company has more assets than liabilities due within a year, while a ratio less than one suggests the opposite.)
Disclaimer: This article is for informational purposes only and must not be considered investment advice. We do not recommend any particular stock, securities and strategies for trading. The securities quoted are exemplary and are not recommendatory. The stock names mentioned in this article are purely for showing how to do analysis. Take your own decision before trading and investing.

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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