Best Debt-Free Stocks For Long-Term Investment

1. Chennai ferrous was incorporated on 07 May 2010, as a public limited company with the main objective to manufacture sponge iron products.

The company’s manufacturing is in OPG nagar periya obulapuram village, Gummidipoondi.

Market cap:	64.83 Cr.
No. of shares:	0.36 Cr.
P/E:	2.78
P/B:	3.33
Face Value:	10
Book Value:	53.94
Cash:	0.64 Cr.
DEBT:	0 Cr.
Sales growth:	106.50%
ROE:	923.54%
ROCE:	923.56
Profit growth:	400.03%

Shareholding pattern of the company:

Promoter holding: 70.83%

Public holding: 29.15%

FII holding: 0%

DII: 0%

Strengths:

• The company has PEG ratio of 0.01cash conversion cycle of the company is -93.43 days.

• High promoter holding of 70.85%

• The company’s operating leverage, average operating leverage stands at 4.24

• The company is debt free.

• Cover the last 5 years the company has delivered good profit growth of 63.8%.

Weakness:

• The company is not paying out dividends though the company is reporting a good profit.

• The tax rate is very low.

Is Chennai ferrous a good investment?

Some tools are helpful to analyze the stock which is given below:

PE ratio: the stock is comparatively undervalued and its P/E ratio is 2.78.

Return on Assets (ROA): the stock has a ROA of 48.93% which is a good sign for future performance.

Current ratio: the stock has a 1.52% of the current value which indicate the company has the ability to pay its short-term liabilities with its short-term assets.

Return on equity: the company has higher ROE of 923.54% which good for its investor.

Debt to Equity ratio: the company has a D/E ratio of 0 which means that the company has low proportion of debt in its capital.

Inventory turnover ratio: 29.51 turnover ratio of the company shows that the management is efficient in relation to its inventory and working capital management.

Sales growth: the company has reported revenue growth of 106.50% which is fair in relation to its growth and performance.  

2. Dhyaani Tile and Marbles Ltd.

Dhyaani Tiles and Marbles is engaged in the business of trading a variety of tiles used for flooring solutions.

Market Cap:	11.8 Cr.
No. of Shares:	0.15 Cr.
P/E:	15.41
P/B:	274
Face value:	10
Dividend Yield:	0%
Book value:	28.49
Cash:	1.65%
DEBT:	0
Promoter Holding:	66.32%
52-Week High:	95
52-Week Low:	0

Strengths:

• The ROCE of the company is 46.82% over the past 3 years.

• The company is debt free

• The cash conversion cycle of the company is 0 days.

• The company has good promoter holding.

• The company has good ROE of 69.9% over the last 3 years.

Weakness:

• The company has good profits till not giving any dividends.

• Other earnings also include in the profit of the company nearly 1.54 Cr..

• 196 days debtors’ ratio is very high.

3. Prevest Denpro Ltd

The company incorporated in 1999

Prevest denpro is a developer, manufacturer, and marker of dental materials for diagnosing, treating, and preventing dental conditions.

The company product portfolio covers a wide spectrum of materials for endodontics, prosthodontics, orthodontics, periodontics, restorative dentistry, aesthetic dentistry, and laboratory consumables.

The company exports its products to various regions like Europe, Asia, South America, the Middle East, and Africa.

Aarti Drugs share price Prediction

Fundamentals of the company:

Market Cap:	431.87 Cr.
No. of Shares:	1.20 Cr.
P/E:	32.65
P/B:	6.74
Face value:	10
Dividend Yield:	0
Book Value:	53.40
Cash:	42.34 Cr.
DEBT:	1.37 Cr.
Promoter Holding:	73.6%
Sales Growth:	32.12%
ROE:	29.07%
ROCE:	39.64%
Profit Growth:	60.53%

Strengths:

• The company has had good profit growth of 56.92% for the past 3 years.

• The revenue growth of the company is 24.97% for the past 3 years.

• ROE of the company is 35.44% over the past 3 years.

• The ROCE of the company has been 44.08% over the past 3 years.

Limitations:

• The company is not paying dividends while the company is reporting repeated profits.

4. Likhitha Infrastructure Ltd.

The business of Likhitha Infrastructure ltd is pipe laying by providing comprehensive erection, testing, and commissioning of oil and gas pipelines, City Gas Distribution Projects, and their maintenance and operation.

Market Cap:	921 Cr.
P/E:	8.88
P/B:	2.16
ROE:	24.38
Book value:	55.3
Dividend Yield:	0.52%
52 Week High:	274
Week Low:	118

Strengths:

• The company is debt free

• The company has good profit growth of 42.7 over last 5 years.

• The company has good ROE return of 27.5% over last 3 years.

Limitations:

• Debtor days of the company are inCr.eased from 69.2 to 96.2 days.

5. DHP India Ltd

DHP India Ltd was incorporated in 1991 as privet Let. company but later in 1995 the company be a public ltd company.

The company produces the products like propane, butane, LPG regulators, hose assemblies, and brass fittings.

Fundamentals of DHF India Ltd:

Market cap:	316 Cr.
No. of Shares:	0.30 Cr.
P/E:	8
P/B:	1.85
Face Value:	10
Dividend Yield:	0.38%
Book Value:	567.77
Cash:	1.62 Cr.
DEBT:	0.28 Cr.
Promoter Holding:	73.42%
Sales Growth:	70.07%
ROE:	27.46%
ROCE:	35.80%
Profit Growth:	53.89%
52-Week High:	1700
52-Week Low:	0

Strengths:

• The profit growth of the company is 40.31% for the past 3 years.

• The revenue growth of the company is 21.19% for the past 3 years.

• The company deCr.eased its debt by 0.30 Cr..

• The ROCE of the company is 25.53% over the past 3 years.

• The company is now virtually debt free.

Limitations:

• Debtor days of the company have inCr.eased from 44.7 to 62.0 days.5. Diamines and Chemicals Company (DACL)

5. Diamines and Chemicals company

Diamines and Chemicals Company was incorporated in the year 1976.

The company has been the sole manufacturer of ethylene amines in Indian subcontinents.

The company also invested in Wind turbines across the country.

Fundamental OF Diamines and Chemical Ltd.

Market Cap:	440.93 Cr.
No. Shares:	0.98 Cr.
P/E:	13.34
P/B:	3.67
Face Value:	10
Dividend Yield:	0.67%
Book Value:	122.71
Cash:	40.32 Cr.
DEBT:	0 Cr.
Promoter Holding:	54.56%
Sales Growth:	5.24%
ROE:	18.05%
ROCE:	23.92%
Profit Growth:	-20.49%
52-Week High:	598
52-Week Low:	0

Strengths:

• The debt of the company deCr.eased to 0.30Cr.

• The ROE of the company is 29.38% over the past 3 years.

• The ROCE of the company has been 39.72% over the past 3 years.

• It is virtually debt free.

• The company has an interest coverage ratio of 259.56.

Limitations:

• The profit growth of the company is 8.39% for the past 3 years.

• The revenue growth of the company is 11.79% for the past 3 years.

• For the last 3 years, the holding of the promoters has decreased -10.6%

Conclusion:

Debt-free companies have a strong financial management system and these companies are using their investment in the right direction. These companies are fundamentally strong so before investing check the all fundamentals of the company.