Following it were Bharat Electronics, NM-DC, Whirlpool India and Pfizer with cash to assets ratios of 40.1 per cent) and Hotel Leela Venture (84.GSK Consumer’s standalone operating profit and net profit grew by 17 per cent each in FY16, while OFSS saw its consolidated operating profit go up marginally by one per cent and net profit declined to a limited extent by one per cent in FY16.Among them, PSL and REI Agro had suffered operating losses in FY16 to the tune of Rs 1,182 crore and Rs 925 crore respectively, making them highly stressed cases. While cash reserves are a sign of sound fundamentals, the trouble arises when it ends up dominating the assets side of corporate balance sheets.7 per cent), Oracle Financial Services Software (48.1 per cent. Its consolidated net cash was Rs 2,613 crore against its total assets of Rs 4,158 crore at the end of FY16.4 per cent), Suzlon Energy (105.The problem was less severe in Suzlon Energy although it had a higher debt to assets ratio of 105.Oswal Green Tech, whose industry classification in Capitaline database -was "construction factories /offices/commercial," had the fourth highest cash to assets ratio of 61. It is quite interesting for metal companies to have very high cash-assets ratio, given that the sector has undergone one of the toughest phases in the last couple of years.7 per cent), Electrotherm (India) (134.9 per cent). So, when we scanned the debt levels of listed companies (see methodology), excluding banks and finance companies as of the end of FY16, we found no dearth of them.Investors sense things going out of control when dividends are low or missing altogether, and when inadequate attempts are made by the company management to tap into business expansion or potential acquisition opportunities.Ambit Capital’s CEO-institutional equities Saurabh Mukherjea, believes a high cash level only indicates good financial health, but it is not necessarily a driver of good health.Good moneyIn India, there are some companies, which occupy a place under the sun for the simple reason that they constitute a rarity in a world dominated by high debt stress. "Having large cash in its balance sheet is fine, but if a company is allocating capital poorly, then for the investors the return on capital employed is also going to be poor.OMDC’s financial statements give its key operating segments as iron ore, manganese ore and sponge iron, but all its operating revenues are categorised as unallocated.4 per cent), MOIL (76.Lakshmi Machine Works (LMW) had the tenth highest cash to assets ratio of 44.9 per cent to 365.1 per cent), Glaxosmithkline Pharma (44. The story is, by any chance, not new. We, however, believe credit growth is unlikely to revive materially in the near term as demand is still significantly a laggard in the system.Financial year 2016-17 will be taxing for debt China Blue custom Polyester stretch Fabric Company stressed firms to lower their obligations.5 per cent), Engineers India (62. When we scanned our analysed universe of listed companies for cash rich companies, we came up with a short list.Suzlon Energy, through its spokesperson, did get back to us with an extensive reply saying that the increase in debt to asset ratio was primarily due to sale of assets affected by Suzlon to attain deleveraging.In retrospect, it becomes apparent that FY15 was the only time in the last five years where sentiments of Indian companies had risen somewhat on the back of expected boost in the domestic economy.

The company already has Baosteel, China as a strategic investor in the ferrous chrome business and SunCoke Energy, USA as strategic investor in the coke business. "Needless to say, the sale of Senvion is a landmark transaction for Suzlon that enabled it to attain significant deleveraging and re-entry into profit as reflected in our FY16 results," it said. REI Agro was into food processing, while Electrotherm and Suzlon belong to the engineering and power sectors respectively.In our analysis, the 10 companies whose total debt, as a proportion of their total assets was the highest, include – Hanung Toys & Textiles (365. It lacks its own assets like machinery, cranes and tools.5 per cent at the end of FY16.The current financial year, and the next few ones, will indeed be very challenging for the debt-stressed companies to bring down their debt levels and debt-to-assets ratios.Financial year 2016-17 will be taxing for debt stressed firms to lower their obligations. Companies seeing steady cash flows from sales and recording profitability consistently, end up piling up cash reserves year after year.0 per cent, 38.9), Oswal Green Tech (61.3 per cent (fifth-highest) and 48. The company has a consistent dividend payout policy," he says.But in that year, Capitaline data of its consolidated financials showed that it recorded an operating loss of Rs 370 crore against an operating profit of Rs 107 crore in the previous year.Hotel Leela had the tenth largest debt to assetsratio of 84. Capitaline data showed its standalone net sales in FY16 to have declined by 24 per cent to Rs 629 crore, while its operating profit and net profit slid by 54 per cent each to Rs 323 crore and Rs 194 crore, respectively.FMCG company GSK Consumer Healthcare and IT firm, Oracle Financial Services Software or OFSS, too did not share their perspectives on their respective cash-assets ratios of 60. Moser Baer is into IT hardware and Hotel Leela, as the name itself suggests, comes from the hospitality industry.8 per cent, indicating a stretch at both the ends.

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