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Red Alert: Know which debt-laden company you should invest in

Reversal in earnings growth and reduction in promoters’ shares pledged could be a positive and result in strong returns for investors.

, ET Bureau|
Last Updated: Aug 15, 2014, 07.30 AM IST|Original: Aug 15, 2014, 07.27 AM IST
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Reversal in earnings growth and reduction in promoters’ shares pledged could be a positive and result in strong returns for investors. 
Reversal in earnings growth and reduction in promoters’ shares pledged could be a positive and result in strong returns for investors. 
The Bhushan Steel incident reminds us that good days aren’t here yet, at least, not for all companies. Buying into some of the high-debt companies with a sizeable portion of the promoters’ shares pledged could be a risky bet. All these companies have debt to EBIDTA of above-industry average and promoters’ pledged free holding is less than 25% of total shares.
However, reversal in earnings growth and reduction in promoters’ shares pledged could be a positive and result in strong returns for investors. For instance, India Cements could benefit from the reversal in the investment cycle.


Red Alert: Know which debt-laden company you should invest in

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