7 companies which reduced their debt the most in FY21 | latest share market updates - YouTube

Hi, many companies announced their Q4 results in FY21

and today we will tell you about those companies that reduced their debt the most

Accumulating debt is not good for companies, we have seen cases like DHFL, and Videocon

who accumulated a lot of debt and then went bankrupt so if companies reduce debt it is good for the company and the investors

So today we will discuss 7 such companies that reduced their debt and interest coverage ratios

The interest coverage ratio is calculated by dividing profit before interest and tax by interest expense

If the interest coverage ratio is less than 1, that means the company is not being able to meet its interest expenses

and is considered a red flag, the more the ratio the better it is meaning the company is handling its interest expenses well

So let us start the list which will be in ascending order, meaning the highest reduced debt is discussed the last

At number 7 is Bharat Petroleum Corporation Ltd, they market crude oil refining and petroleum products

They reduced their debt by Rs.17,887 Cr in FY21 and its debt-equity ratio is 0.89 which the industry average

Its interest coverage ratio is 10.96 which is very good, its ROE is 27.32%, and NPM is 5.76%

The 5-year sales have compounded by 4.15%, PE ratio is 8.19 and the share price jumped 21.86% in the past year

and its 5-year compounded annual return has been 5.5%

At number 6 is Steel Authority of India, SAIL that reduced its debt by Rs.18,550 Cr in FY21

Its debt-equity ratio is 0.78 and its interest coverage ratio is 3.54

Its PE ratio is 13.37, its 5-year sales growth has been by 12.24%, and its share price jumped 350.76% in the past year

Its 5-year CAR is 24.05%, NPM is 5.95%, and ROE is 9.47%

At number 5 is Aditya Birla groups flagship company Grasim Industries

And they operate in viscose staple fiber, caustic soda, specialty chemicals, cement, fertilizers and textiles

They reduced their debt by Rs.20,456 Crs in FY21, its debt-equity ratio is 0.98, and interest coverage ratio at 2.81

Its ROE is 7.29%, NPM is 9.45%, PE ratio is 22.49, its 5-year sales growth has compounded by 17.24%

Its share price jumped 145.56% in the past year and its 5-year CAR is 15.16%

At number 4 is Indian Oil Corporation that is a market leader in oil refining and petroleum marketing

They reduced their debt by Rs.21,275 Crs after which their debt-equity ratio was at 0.97

and its interest coverage ratio became 9.57 which is very good

Its Pe ratio is 4.82 which is very low, its 5-year sales growth compounded by 1.01%

Its ROE is 20.88%, NPM is 5.98%, its share price jumped by 27.27% in the past year and its 5-year CAR is 0.11%

At number 3 is automobile company Mahindra&Mahindra, they reduced their debt by

Rs.23,013 Crs after which its debt-equity ratio came to 1.43 which is still on the higher side in the industry

Its interest coverage ratio is 1.71, PE ratio is 54.43, ROE is 4.45%

NPM is 3.01%, 5-year sales growth has compounded by -0.42%

Its share price jumped by 56.37% last year and its 5-year CAR is 2.11%

At number 2 is steel maker Tata Steel that reduced their debt by Rs.27,826 Crs in FY21

Its debt-equity ratio is 1.2 and its interest coverage ratio is 2.91

Its 5-year sales growth has compounded by 8.92%, ROE is 10.85%, NPM is 5.49%

Its PE ratio is 18.13, its share price jumped by 269.02% in the past year and its 5-year CAR is 31.01%

At number 1 is Reliance Industries which is India's largest company by market cap

And it reduced its debt by Rs.84,485 Crs in FY21, its debt-equity ratio is 0.41 and its interest coverage ratio is 3.35

Its PE ratio is 31.31, it is involved in many businesses like digital services, media, entertainment, crude oil refining, retail etc

If we see its profitability, its NPM is 10.37%, and ROE is 7.97%

Its share price jumped by 21.06% and its 5-year sales growth has compounded by 11.34%

and the company has given a 5-year CAR of 34.16%

So these were the 7 companies that reduced their debt the most in FY21

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