Debt always feels burdensome, whether in the real life of an individual or in companies. Although it is also true that to acquire certain assets such as property, machinery, land, or any other assets that are expected to generate profits soon, we use debt for procurement. One of the reasons we opt for debt is our confidence that the acquired assets will enable the company to generate a substantial amount of money, facilitating normal business operations and eventual repayment of the debt.
However, obtaining debt is an easy task, but the timely repayment of it without any defaults leaves a positive impression and improves credit ratings, whether for a company or an individual.
Banks or lenders are hesitant to lend money to those companies with an unclear or tarnished payment history. Similarly, we also exercise caution and do not lend money to those whose creditworthiness is inadequate.
In this article, we will explore micro-cap companies that have managed to reduce their debt in FY23 and have reported significant profits in Q1 FY24 as compared to Q1 FY23.
| Company Name | Industry / Sector | CMP Rs | Debt FY22 Rs in Cr | Debt FY23 Rs in Cr | % Change | PAT Q1 FY23 Rs in Cr | PAT Q1 FY24 Rs in Cr | % Change YoY | 1-Yr Return % |
| Krishna Defence | Defence | 226.50 | 23.09 | 18.52 | 19.79% | – | – | – | 162.93 |
| Menon Pistons | Auto Ancillaries | 110.60 | 74.61 | 64.25 | 13.89% | -0.18 | 3.61 | 2,105.56 | 694.44 |
| KCP Sugar & Industry | Sugar | 31.65 | 189.56 | 184.60 | 2.62% | -5.67 | 30.68 | 641.09 | 51.29 |
| Premier Polyfilm | Plastic Products | 128.10 | 342.70 | 274.63 | 19.86% | 2.11 | 11.71 | 454.98 | -17.16 |
| Arrow Greentech | Plastic Products | 312.90 | 4.73 | 2.51 | 46.93% | -4.53 | 9.32 | 305.74 | 334.80 |
| Modern Insulator | Capital Goods | 62.48 | 25.88 | 8.02 | 69.01% | 0.98 | 3.96 | 304.08 | 50.46 |
| Shreyans Industries | Paper | 222.50 | 61.46 | 42.28 | 31.21% | 8.39 | 31.97 | 281.05 | 82.59 |
| Panorama Studios | Entertainment | 210.00 | 74.09 | 42.69 | 42.38% | -2.00 | 2.32 | 216.00 | 109.47 |
| Vertoz Advertising | Miscellaneous | 254.75 | 10.00 | 8.45 | 15.50% | 1.41 | 3.54 | 151.06 | 207.11 |
| W S Industries | Construction | 125.60 | 22.94 | 10.04 | 56.23% | 2.20 | 4.78 | 117.27 | 20.34 |
| SBC Exports | Trading | 22.37 | 9.32 | – | 100.00% | 2.34 | 4.58 | 95.73 | 213.97 |
| Riddhi Siddhi Gluco Boils | Trading | 395.75 | 155.01 | 80.98 | 47.76% | 4.29 | 7.23 | 68.53 | 0.13 |
| Anmol India | Trading | 47.90 | 1,430.87 | 305.49 | 78.65% | 8.13 | 9.19 | 13.04 | 33.07 |
| High Energy Battery | Capital Goods | 535.80 | 24.53 | 20.85 | 15.00% | 2.46 | 5.95 | 1.42 | 40.08 |
| Kothari Products | Trading | 132.10 | 23.28 | 14.65 | 37.07% | 8.77 | 7.33 | -16.42 | 44.26 |
Some stocks have generated impressive returns over the last year, while others are yet to perform.
As of now, Krishna Defence has not released its June quarter results. The reason for considering the company is its involvement in the defence sector, which is currently experiencing a boom. It would be remiss to overlook defence stocks in such a scenario. Hopefully, the company will report a profit in the June quarter, as it has consistently done in the past three quarters.
Investors must keep an eye on these micro-cap companies.
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