Debt-free companies are attractive to investors primarily because of their financial stability. Without the burden of debt obligations, these companies are less vulnerable to market fluctuations or economic downturns. They do not have to worry about servicing loans or paying high-interest rates, which can often restrict growth during challenging economic periods.
TD Power Systems Ltd. is an Indian engineering firm specialising in the design and production of power generation equipment, has successfully remained debt-free since March of the previous year.
In the second quarter of fiscal 2025 TD Power Systems saw a 13% jump in consolidated total revenue to ₹309 crore as against ₹273 crore in the same quarter of the previous fiscal.
The company’s profit after tax also surged 28% to ₹41 crore. Earnings before interest and tax and depreciation came in at Rs 58 crore in the September 2024 quarter, up from ₹47 crore in the preceding quarter.
On November 26, 2024, TD Power Systems share priceclosed 1.39% lower at ₹449.55 on the NSE.
eMudhra Ltd, a company specialising in digital transformation and cybersecurity solutions, eliminated its debt by the September quarter, thanks to the proceeds from a Qualified Institutional Placement (QIP) in January.
For the second quarter, eMudhra Ltd reported a significant revenue growth of 47.5% year-on-year, reaching ₹1,426.7 million. The company achieved an EBITDA of ₹338.3 million, reflecting an EBITDA margin of 23.7%. Additionally, eMudhra’s net income for the quarter stood at ₹223.0 million, resulting in a net margin of 15.6%.
On November 26, 2024, eMudhra share priceclosed 0.74% higher at ₹895.80 on the NSE.
Jupiter Life Line Hospitals, a leading healthcare provider, raised ₹869 crore through an initial public offering of its shares in October of the previous year. The funds raised were primarily used to clear the company’s outstanding debt.
Jupiter Life Line Hospitals reported a consolidated net profit of ₹51.50 crore, marking a 52.9% increase compared to the same quarter last year. EBITDA for Q2 FY25 stood at ₹76.6 crore, reflecting a 23.5% increase compared to the same quarter last year.
On November 26, 2024, Jupiter Life Line Hospitals share priceclosed 0.90% lower at ₹1,526.40 on the NSE.
It is important to note that not all debt is detrimental. In some cases, maintaining a manageable level of debt can support a business’s capital efficiency and growth potential. Relying on equity funding to settle debt may sometimes indicate underlying weaknesses in a company’s financial health.
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