Top 5 companies that reduced the maximum debt in FY24

livemint.com:

an election year’. Investors looking for stability shifted their focus to strong fundamentals and a few promising sectors rather than betting on the overall market. With the economy battling inflation and high interest rates, companies had to find a way to take advantage of the country's economic growth.

Hence, they learned to manage inflation, and focussed on debt reduction during the year to improve their financial health. While most companies adopted this approach, we have shortlisted the top five companies that managed to reduce their debt by over 50%. This coupled with improved financial performance, and significant growth in share price portrays strong resilience and strategic success.

Here’s the list… Part of the Tata Group, it is one of the leading hospitality companies in India and South Asia. In the last year, the company reduced its debt from ₹8.1 billion (bn) to ₹2.6 billion due to strong cash flows. In the last five years, the company focussed on asset light model, primarily through management contracts.

This helped the company rapidly expand its hotels portfolio without much capex. As a result, the company was left with sufficient cash to repay its debt. A strong portfolio, support from parent company (Tata Sons) and a growing demand for travel, has helped the company grow its revenue by a compound annual growth rate (CAGR) of 8.7% in the last five years.

The gross and net profit of the company also grew by a CAGR of 16.4% and 27.9%, indicating its operational efficiency. Its debt-to-equity ratio also reduced, and the interest coverage ratio improved consistently on account of strong growth in the company's cashflows. A strong financial performance also led to a positive performance on the bourses.