Please verify your Email ID and Mobile Which companies to invest in india today. Multiply your wealth now with multibaggers from poweryourtrade. Assets figures as per the latest Balance Sheet available.
Please forward this error screen to bh-in-20. How to Plan a Home Purchase? Why not to use credit card? How to Stop Overspending of money? India experiences both high inflation and high interest rates. Immediate effect of both, on companies finance is negative.
Companies which remain isolated from effects of high interest rates are debt free companies. The companies which are more dependent on debt to manage their working capital, face the burnt of high interest rates. Interest rates of debt is fluctuating. When interest rates goes up, it will eventually increase the expense of company. This will automatically translate into lower profits. Zero debt companies in India are ones which are more self reliant.
Such companies are best suited for long term investing. Profitability of zero debt companies are generally more than high debt companies. Debt is a liability which has also a big cost attached to it. Hence companies which may be earning lesser profits, but carry zero debt, are more preferable by value investors.
In India we have several zero debt companies. High interest rates negatively effects the profitability of high debt companies. In periods of soaring interest rates, low debt and debt free companies emerge as clear winners. In India, interest rates remain very unpredictable. One never know when rising trend will start again. This mainly happens due to wavering inflation. In India inflation can stabilize for few year.