5 zero debt stocks with high dividend yield – Stock Insights News

 “Debt is like a double-edged sword. While it can amplify returns, it can just as easily magnify risks.”

For return-seeking investors, stability is as important as returns. And in the uncertain market environment of today, firms that are completely free of debt and pay good dividends every time are a rare source of financial strength and income generation.

These are firms that do not depend on borrowings but on internal accruals to grow their business—hence they are more stable when there are economic downturns or uptrends in interest rates.

When a debt-free balance sheet is coupled with a generous dividend payout, the result is an attractive investment option for conservative investors looking to build a low-risk, income-generating portfolio.

In this article, we’ve shortlisted five listed Indian companies that meet three key criteria.

First, they have a debt-to-equity ratio of precisely zero, meaning they don’t have any debt on their balance sheets. Second, all of them have a market capitalization of more than Rs 500 crore, which guarantees decent scale and investor interest. And third, all of them have delivered a higher profit in FY25 than in FY24, which indicates improving earnings momentum.

These filters assist us in highlighting essentially sound businesses that are expanding, cash-generative, and rewarding their shareholders—thus making them shine in a choppy market. 

Let’s go through the list of five such zero-debt dividend champions.

#1 Stovec Industries

Incorporated in 1973, Stovec Industries manufactures and sells textile machinery and consumables, graphics consumables and digital machines.

Stovec Industries boasts a strong dividend payment record of more than two decades, attesting to its shareholder-oriented culture and financial discipline. While the absolute dividend amount per share has fluctuated with time, according to the annual reports of the company it has never missed a payment since 2003—a distinction that is rare in the Indian mid-cap universe.

The payments over time have increased significantly, particularly in recent times. In August 2023, the company announced a special dividend of Rs 157, followed by an interim dividend of Rs 115 in May 2024, two of the highest ever payouts in its history.

As per Screener.in the company’s dividend yield is 4.7% as on 2 June 2025.

Both the strength of internal accruals and management optimism are indicated by this upward momentum.

Stovec Industries Dividend History (FY20-FY24)

Stovec Industries had a good performance in calendar year 2024 (CY24), registering a net profit of Rs 13 crore against Rs 11.4 crore in 2023. Revenue increased to Rs 234.5 crore from Rs 207.2 crore due to volume growth and better demand. Its printhead and digital ink segments were good, while services and rotary screens were stable.

Characteristically, this expansion was debt-free, which is indicative of healthy operations and financial prudence. 

In the future, the company is scouting for opportunities arising from export order realignments away from Bangladesh, and making investments in digital print technologies to be positioned in accordance with green trends. Having representation at large exhibitions is also indicative of its market preparedness.

#2 ITC

Established in 1910, ITC is the largest cigarette manufacturer and seller in the country. ITC operates in four business segments at present — FMCG cigarettes, FMCG others, paperboards, paper and packaging, and agri business.

ITC has demonstrated an impressive track record of regular and generous dividends for over two decades. Since 2003, the company has consistently declared dividends — often twice a year in recent times — making it a reliable income-generating stock.

Though the absolute dividend has varied based on performance and one-time items, dividends have generally been in the range of Rs 5 to Rs 8 per share in recent times. FY20 did witness a bumper dividend of Rs 10.15, while 2024 and 2025 have already brought home robust interim and final payments over Rs 13 combined.

As per Screener.in the company’s dividend yield is 3.4% as on 2 June 2025.

This stability is an outcome of ITC’s robust cash flows, diversified business franchise, and shareholder-friendly capital deployment practice.

ITC Dividend History (FY21-FY25)

ITC posted a good performance during FY25, with gross revenue increasing 10.2% to Rs 73,465 crore. Net profit from continuing operations was Rs 20,092 crore and total profit including discontinued hotel business came in at Rs 35,196 crore. This performance is an indication of the company’s strength in the tough macro climate.

ITC is growing its FMCG and paperboards businesses by way of acquisitions such as 24 Mantra, Mother Sparsh, and Century Pulp and Paper. Digital channel investments, premiumisation, and agri-tech (ITCMAARS) seek to enhance rural reach and long-term growth.

These moves demonstrate ITC’s intent to diversify away from tobacco and build future-proof segments. With robust cash flows and execution skills, the company is poised for sustainable growth.

#3 SKF India

SKF India Ltd is a leading supplier of products, solutions & services within rolling bearing, seals, mechatronics, and lubrication systems.

The company has a rich history of paying dividends every year since 2003, reflecting its focus on shareholder returns. Dividend sizes have typically fallen in the band of Rs 2 to Rs 15, but the last few years have witnessed a steep increase.

It is also worth mentioning that it paid Rs 130 per share in 2020 and 2024 and Rs 40 in 2023—its all-time high payouts. This indicates not only good cash flows but also improving management confidence in the visibility of company earnings. In FY25 the company declared a special dividend to commemorate 100 years of SKF in India.

As per Screener.in the company’s dividend yield is 2.8% as on 2 June 2025.

SKF India Dividend History (FY21-FY25)

SKF India ended FY25 with 8% revenue growth at Rs 4,831 crore on the back of 10% growth in industrial and 6% increase in automotive business. Profitability continued to be robust with a slight fall in PBT margin, led by operational efficiencies.

The demerger of the automotive and industrial businesses in the near future is likely to improve management intensity and capital productivity. 250–300 crore is also being invested over the next 2–3 years by the company, including a new Pune plant.

#4 Swaraj Engines

Swaraj Engines was established in 1989 it manufactures diesel engines specifically for tractors in the range of 22 HP to above 65 HP and hi-tech engine components.

Swaraj Engines has shown a stellar record of consistent dividend payments, posting an uninterrupted run of more than two decades. Though initial years witnessed moderate payments, dividend size has witnessed a sharp positive trend in the decade gone by—indicative of robust profits and cautious capital deployment.

Since 2020, the corporation has incrementally raised its dividend, breaking into a record Rs 104.5 per share in FY25 from Rs 95 in FY24 and Rs 92 in FY23. The constant increment, even during periods of macroeconomic adversity, reflects robust free cash flows and management optimism.

It has also regularly paid out special dividends, adding further to shareholder value in good years. This combination of reliability and growth makes Swaraj Engines one of the most dependable dividend compounders in the Indian mid-cap universe.

As per Screener.in the company’s dividend yield is 2.8% as on 2 June 2025.

Swaraj Engines Dividend History (FY21-FY25)

Swaraj Engines has announced a robust financial performance for FY25 with impressive growth in revenue and profitability. During Q4 FY25, the company recorded a 29.4% year-over-year growth in revenue to Rs 454.2 crore and 29.1% growth in net profit to Rs 45.4 crore in the same quarter. For the entire fiscal, net profit grew 20.4% to Rs 165.9 crore while revenue from operations was higher by 18.5% at Rs 1,681.8 crore.

To respond to continuing demand and to ensure future expansion, the company board has sanctioned a plan for engine capacity expansion. The plan will raise the manufacturing capacity from 195,000 units to 240,000 units per year. 

The expansion, which will be fully financed through internal accruals, will also include the upgrading of manufacturing technology to address future needs.

#5 India Motor Parts and Accessories

India Motor Parts & Accessories (IMPAL) is engaged in the distribution of automobile spare parts and accessories through its distribution network representing over 50 manufacturers.

IMPAL has shown remarkable consistency in rewarding shareholders, with dividend payouts declared almost every year for the past two decades. The company has followed a regular pattern of interim and final dividends, reflecting its stable cash flows and conservative capital management.

Whereas previous distributions varied modestly between Rs 1.5 and Rs 10, the trend in dividends has significantly improved over the past few years. In FY24, the firm distributed a total of Rs 27 per share (Rs 9 interim + Rs 18 final), its highest in the past 10 years. This was followed by an interim dividend of Rs 10 in FY25, indicating strong operations and a high probability of a healthy final dividend as well.

The rising dividend payments reflect not just that IMPAL is financially healthy but ever more shareholder-friendly, and thus a desirable choice for dividend investors.

As per Screener.in the company’s dividend yield is 2.5% as on 2 June 2025.

India Motor Parts and Accessories Dividend History (FY21-FY25)

IMPAL is keen to extend its distribution network in order to strengthen its footprint in India. It plans to strengthen operational efficiency by digitising and optimising supply chains.

It is also examining collaborations and new product offerings to diversify revenues. With its conservative financial strategy, IMPAL remains focused on delivering long-term value for shareholders.

Conclusion

Investing in zero-debt stocks with large dividend yields can be a good policy, particularly for investors who want a combination of stability, reduced financial risk, and frequent income. Such stocks usually exhibit prudent capital management and consistent profitability, so they are appealing in volatile market conditions.

Yet, although dividends are a good barometer of shareholder concentration, they represent only a component of the larger investment context. It is necessary to know if the dividends are supported by solid earnings and robust cash flows. A dividend legacy can indicate maturity and operational health, but sharp spikes occasionally may be the result of one-off gains instead of trends.

The overall business environment, growth transparency, and industry dynamics all contribute to assessing the power and durability of such firms. A holistic perspective of fundamentals and potential in the future places dividend performance in proper context.

Disclaimer

Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information. 

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only. 

Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep deep into the world of companies, studying their performance, and uncovering insights that bring value to her readers.

Disclosure: The writer and his dependents  do not hold the  stocks discussed in this article. 

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