How to find debt free companies in India? [Using Screener]

How to find debt free companies in India using screener

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.

Note: I have explained in details how to check the debt and other financials of a company in my online course: HOW TO PICK WINNING STOCKS. Feel free to check it out here.

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)

screener website

3. Scroll down to find the query builder.

4. In the query builder, write the following:

Debt to Equity = 0

query debt free companies screener

5. Run the query

6. You will get the list of all the debt-free companies in India.

debt free companies

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

large cap with zero debt

This will give you the list of all the large-cap companies with D/E ratio < 0.5

low debt companies in india-low debt to equity with large cap

Source: Screener

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:

debt free companies in India large cap

Source: Screener

That’s it. This is all you need to do to find the debt free companies in India. Isn’t it simple?

Also read: 7 Must Know Websites for Indian Stock Market Investors.

I hope this post is useful to the readers. Please comment below if you have any questions.

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About Kritesh Abhishek 205 Articles
Hi, I am Kritesh, an NSE Certified Equity Fundamental Analyst. I'm 23-year old 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 (Connect with me over twitter here).

3 Comments

  1. hello sir,

    very informative post appreciate your effort.
    one doubt if debt to equity ratio shows minus, what does that means?

    regards

    one more request can u also write a post on F&O in stock market.

    thanks

    • Negative debt to equity ratio is a very special scenario. Here either the numerator or denominator has to be negative. If debt is negative, it means that the company has net cash (i.e. cash in hand exceeds debts- good scenario). On the other hand, if equity is negative, it means that excess loss compared to equity, not a good sign. I hope this helps.
      Further, I will be doing a post on F&O soon.

  2. Hello. Only recently have I started reading and analyzing stock related concepts, so just to be clear, when it shows debt to equity ratio as zero, does that also mean that the company has not issued any preference shares?

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