5 Largecap Companies Which are Debt Free – Latest Stock Market News

As you know there has been a lot of impact of the Coronavirus on the economy And whenever the economy is impacted There is a lot of problems of liquidity And when the problems of liquidity comes, then the companies That have a lot of debt get into problems And the companies that do not have a lot of debt or not debt at all They have chances of surviving well And to perform well in the coming time But I will tell you again that these are just chances It is not necessary because if a company does not have debt They wont have an obligation to pay the interest If they don't have to pay interest Even their profit will come out good And because the obligations are lesser The efficiency of the company will also be better I, Jagdeep Singh, welcome you to the Groww channel The topic for today's video is 5 such large cap companies That do not have any debt on them Or they have negligible debt So we will talk about those 5 companies And in short we will talk about important parameters Like the P/E ratio of the company We will compare that company's P/E ratio to the industry We will talk about that company's market cap And we will talk about the one year return of that company Let us start today's video But before starting the video, if you haven't subscribed to the channel yet Then please subscribe Because on this channel, every week 3-4 videos We put for educational purposes Which can help a lot for you to become a good and an intelligent investor And at the end of the video, I will give you a good learning tip Which can be very helpful for you If you want to start your investment journey Or if you have already started it Now let us talk about the first company Which is a debt free and a large cap company The name of this company is Hindustan Unilever ltd The biggest company in the FMCG space And in the recent days when every industry was impacted because of Coronavirus This company and this industry acted as a defensive stock f it was in anyone's investment portfolio If I talk about the one year return of Hindustan unilever ltd then In the past year they have given 12% return If I talk about its current market price then it trades at around 2000 If we talk about the P/E ratio of Hindustan Unilever ltd The price to earning ratio which tells us what the price of the company is according to the company's earnings So if I talk about HUL's P/E ratio then that is around 70 But I always tell you that whenever you look at a company's P/E ratio Then you have to compare it to the industry So the P/E ratio of HUL is of 70 If I compare that to the industry Then the industry P/E ratio is of 63 The P/E ratio of the entire FMCG industry is quite high And compared to that HUL's P/E ratio is slightly higher If I talk about the market cap of HUL then that is around 4,72,000 crores So if I talk about the operating profit margin of HUL which is a very important parameter Which tells us how much profit comes out from the total revenue of the company How much their operating profit margin comes out to be Then in HUL's case the operating profit margin is around 24% And HUL always tried to keep their operating profit margin above 20% So this was about HUL Now let us talk about the second company, on which there is negligible to 0 debt Now let us talk about the second company which is called HDFC life insurance It is an HDFC company which operates in the life insurance sector And you know that many people have been showing an interest in life insurance for quite some time Because of which even this company has shown good growth In the past few years If I talk about the share price, then the share price of HDFC life trades at around 500 If I talk about it's P/E ratio The price to earning ratio, then that is around 80 If we compare HDFC's P/E ratio to the life insurance industry's P/E The P/E ratio of the industry is around 50 So compared to the industry, HDFC life insurance's P/E ratio is sightly higher After this if we talk about debt, then this company has 0 debt Which means that it has no debt If we talk about the returns given by HDFC life insurance in the past year Then in the past year, HDFC life insurance Has given a return of around 21% After this if we talk about the net operating cashflow of HDFC life insurance, then their net operating cashflow IS quite positive Which is a good thing for this company Now let us go to the third company Which comes from the large cap space and is also debt free And the name of this company is HDFC AMC This is also a company of HDFC Which is an asset management company and operates in the asset management industry Now if I talk about the asset management industry Then you know that if you invest in mutual funds Then you give your money to a particular AMC THe AMC which further invests your money on your behalf In different assets So if you have heard about any mutual fund of HDFC All mutual funds operate under this AMC And there are very limited companies in this space if you want to invest So if you think that there can be a boom in this space in the coming time And if you want to invest in this space There are mainly only two companies where you can invest First, HDFC AMC And second, Nippon So even Nippon is an AMC where you can invest Now let us talk about HDFC AMC The returns it has given in the past year So if I talk about the returns they have given in the past year, then HDFC AMC in the past year Has given more than 40% returns which comes out to be a very good number If I talk about the P/E ratio of HDFC AMc then their P/E ratio is around 42 But if I talk about the industry P/E The P/E ratio of the AMC industry There the P/E ratio comes out to be 15 So as compared to the industry's P/E This company's P/E is quite high Apart from this if I talk about the quarterly result of HDFC AMC Their revenue has been almost constant It has reduced a little If we compare that to the same quarter of last year The same has happened with their net profit that even their net profit Has been almost constant But it has decreased a little So we haven't seen much of an increment in the recent quarter If we compare that to the same quarter of last year Now let us talk about the fourth company and even this company comes from the life insurance sector The name of which is SBI life insurance company So if I talk about the share price of SBI life insurance, then its share price currently trades at 750 And this company, in the past year Has given a return of around 10% Which is not a bad return if we compare that to the index of India If I talk about its P/E ratio then that is around 52 But if we compare this P/E ratio to the industry's P/E ratio Even the industry's P/E ratio is around 52 So its P/E ratio fully matches with the industry There when we spoke about HDFC life insurance Its P/E ratio was quite high compared to the industry If we talk about the market capitalisation of SB life insurance Its market cap is around 75,000 crores So if we talk about the ROE about how the return on equity of this company is Its ROE percentage is around 28% Which is quite a good number And if I talk about debt, then you know from the title of this video 5 such companies that have 0 debt So even on SBI life insurance there is 0 debt This is virtually a debt free company Now let us talk about the 5th and last company which is debt free And even this company comes from the FMCG company And you know that the FMCG sector has given good returns in the past some time And the name of this company is P&G hygiene and health care If I talk about the share price of this company, then this share trades at around 9780 If we look at its return for the past year Then P&G hygiene and healthcare in the past year Gave a -10% return There, its competitors gave positive returns, and this company GAve a -10% return There if we talk about the P/E ratio of this company, then the P/E of this company is around 74 But if we compare that to the industry So the P/E of the FMCG sector is around 63 So compared to the industry the P/E of this company is slightly higher If I compare this to HUL, then even HUL's P/E is 70 But compared to 70, the P/E of P&G is slightly higher After this if I talk about the operating profit margin, then that of this company Is around 18% Which is a modertae number but if we compare that to HUL Then the operating profit margin of HUL is slightly better So this was the list of those 5 companies that are from large cap and come from different sectors And on whom there is no debt And people are trying to avoid debt a lot now I felt it would be good to bring out such a list for them Now let us talk about the important tip which I told you I would talk about at the start of the video So this video was about debt, I spoke about those 5 companies on whom there is no debt Now you must be thinking is it wrong for debt to be there on any company No, if a company takes any debt And only to the limit where the value of the company is increasing If I talk about value, then consider if a company is expanding Where the company is getting some profit And for expansion consider that the company needs 100 crores debt And by investing 100 crores The company will be able to earn so much That the company will be able to pay interest on the debt And after that the company will be able to earn good profits as well So if a company utilizes debt in the right way Then taking debt isn't wrong at all But if you think that the debt amount of any company is getting too much And the company is continuously incresing its debt amount Its net profit is reducing Their operating profit margin is reducing You should consider that as a red flag and avoid such companies So at the end of the video I would like to ask you a question, which company out of these 5 is your favourite In which you think you should invest And I will tell you again that this video was purely for educational purposes WE absolutely do not recommend the buying or selling of any stocks If you liked this video, press the like button You can comment and answer our question And share this video with your friends so that this information can reach even them If you haven't subscribed to the Groww channel yet Then please subscribe Because we put up 3-4 videos every week on this channel Which can help a lot for you to become a good and an intelligent investor Happy investing!