Looking for High-Risk Penny Stocks? These 3 Debt-Free Companies, Including Shree Digvijay Cement & Singer India, Could Be Game Changers

Penny stocks are often seen as risky investments, but some stand out because they manage to stay debt-free. This gives these companies more flexibility to invest in growth and handle challenges without the pressure of paying back loans.

As we move closer to 2025, a few debt-free penny stocks are showing great promise for growth. These companies have built a solid foundation with smart management, a clear vision, and strong financial discipline, all while staying debt-free. Let’s take a closer look at three such stocks that might be worth considering.

1. Shree Digvijay Cement

Shree Digvijay Cement is a cement manufacturer, offering products like Portland Pozzolana Cement, Ordinary Portland Cement, Sulphate Resisting Portland Cement, and oil well cement, sold under the brand name ‘Kamal.’

Over the last five years, the company’s revenue has grown by 13% per year, while net profit surged by 115% per year, mainly due to better sales and higher volumes. The company expanded its production capacity from 1.2 million tonnes per annum (MTPA) to 1.5 MTPA, which has improved its financial returns. In March 2023, its return on equity (RoE) was 24.9%, and its return on capital employed (RoCE) was 34.1%.

Shree Digvijay Cement has been paying off its debt over the years and is now debt-free. It also has a strong dividend payout history, with an average payout of 80.7% over the last three years and a dividend yield of 3.2%. By 2025, the company expects its cement volumes to grow, thanks to demand from the infrastructure sector and plans to increase its grinding capacity from 1.5 MTPA to 3 MTPA.

The expansion project will cost ₹250 crore, half of which will be funded through internal cash and the rest through debt. While there are risks around completing this project on time and within budget, Shree Digvijay’s track record gives investors confidence.

2. Rubfila International

Rubfila International is one of India’s leading manufacturers of heat-resistant rubber threads. It’s the only Indian company making both talcum and silicon-coated rubber threads. These products are used in specific markets, such as toys, meat packing, medical webbing, and even bungee jumping cords. Rubfila has also moved into the hygiene segment by acquiring Premier Tissues.

With a production capacity of 20,000 metric tonnes (MT), Rubfila is expanding to meet growing demand. Over the past five years, the company’s revenue has grown by 17% each year, driven by the rising demand for its rubber threads, while net profits have grown by 6%.

Being debt-free allows Rubfila to consider taking on new opportunities without financial strain. It also pays regular dividends, with an average payout of 24% over the last three years and a dividend yield of 1.5%. The company’s strong brand presence in India and overseas is one of its biggest strengths, positioning it for further growth in international markets.

Although the innerwear and garment industries have slowed down in recent years, they are expected to recover soon, which will likely boost demand for Rubfila’s products.

3. Singer India

Singer India manufactures sewing machines and household appliances. It operates on an asset-light model, meaning it outsources manufacturing and has warranty agreements with vendors for major defects. This model keeps costs low.

In recent years, Singer India has faced intense competition from larger players in the consumer durables market, which has impacted profitability. However, the company remains debt-free and is focusing on value engineering—improving products while reducing costs—to boost its profit margins.

This year, Singer India plans to introduce a new range of industrial sewing machines and expand its line of Zig Zag household machines, which have low market penetration in India and offer big growth potential. The company also aims to grow its appliances business by enhancing its brand image and offering more premium products.

Notably, late investor Rakesh Jhunjhunwala’s company holds 4.3 million shares of Singer India, representing 6.9% of its portfolio as of the June quarter.

Conclusion

Penny stocks can be risky investments, but focusing on debt-free companies with strong growth potential can reduce some of that risk. The three companies mentioned above—Shree Digvijay Cement, Rubfila International, and Singer India—have a combination of financial discipline and growth potential that makes them stand out in the penny stock space.

While operating without debt gives these businesses more freedom to reinvest and expand, it’s important to remember that all penny stocks, even debt-free ones, can be volatile. Investors should do their research and consider their risk tolerance before making any investment decisions.