It is very rare that 2 stocks have passed a list of tests many smart investors check for before picking stocks. Like a low debt-to-equity ratio, high dividend yield etc.

A low Debt-to-Equity ratio tells you how good a company is managing debt, as low debt means freedom from interest payments that eat into profits. And high dividends mean the company is more than willing to share winnings with their investors.

We ran a screen on screener.in for such stocks and 2 stocks caught our attention. Because the list had only 2 chemical stocks, and both deserved a deeper look.

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Gujarat Narmada Valley Fertilizers & Chemicals Ltd – The State-Backed Giant Trading at a 48% Discount

Established in 1976, Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC), is a joint sector enterprise promoted by the Gujarat State Investments Limited (GSIL), a Government of Gujarat undertaking, and the Gujarat State Fertilizers & Chemicals Ltd (GSFC).

With a market cap of Rs 7,027 cr, the company is one of India’s largest ammonia manufacturers, a key producer of Toluene Di-Isocyanate (TDI). It operates one of the largest single-stream urea facilities in the country.

The company has a current Dividend yield 3.78% while the industry median when compared to peers is 0.3%. In simple words, for every Rs 100 invested in the company’s stock, at the current market price, an investor receives almost Rs 3.8 annually as dividend, while its industry peers manage only around 30 paisa.

The current Debt-to-Equity of the company is 0%, meaning the company is debt free and hence is free from any hefty interest payments that eat into profits.

The company is a Government of Gujarat undertaking joining hands with Gujarat State Investments Limited (GSIL), both promoters collectively holding over 40% stake in the company.

Looking at the core financials, the sales of the company, its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and Net profits took a hit after FY22 but seem to be on the rebound in the last couple of years.

YearFY20FY21FY22FY23FY24FY25
Sales/Rs Cr5,1625,1298,64210,2277,9307,892
EBITDA/Rs Cr5421,0032,3841,879502615
Profits/Rs Cr5086971,7101,472497598

Financial Resilience: A 117% Growth Story

The share price of Gujarat Narmada Valley Fertilizers & Chemicals Ltd was around Rs 220 in January 2021 and as on 9th January 2026 it was Rs 478, which is a 117% jump in 5 years. Rs 1 lac invested in the company 5 years ago would have been close to Rs 2.2 lakhs today.

At the current price, the stock is trading at a discount of over 48% from its all-time high of Rs 912, giving air to questions about this creates a good entry point for investors who missed the last rally.

The stock is trading at a PE of 11x which is less than the current industry median of 20x, which could mean the stock is undervalued at the moment. The 10-Year median PE for the company is 9x while the industry median for the same period is 14x.

GOCL Corporation Ltd – High Dividends Amidst an Operational Shift

Established in 1961 Indian Detonators Limited (IDL), GOCL Corporation Ltd is engaged in the business of Energetics, Mining & Infrastructure Services and Realty.

With a market cap of Rs 1,370 cr, the company is a part of Hinduja Group which has presence across various industries such as Automotive, information technology, media, entertainment & communications, infrastructure project, development, oil & specialty chemicals, power, real estate and healthcare.

The company has a current Dividend yield 3.6% while the industry median when compared to peers is 0.07%. In simple words, for every Rs 100 invested in the company’s stock, at the current market price, an investor receives almost Rs 3.6 annually as dividend, while its industry peers manage only around 7 paisa.

The current Debt-to-Equity of the company is 0.06%, meaning the company is virtually debt free.

One major development that is worth noting is that the Hinduja Group that holds a promoter stake in the company reduced its stake from 72.82% for the quarter ending June 2025 to 67.82% for the quarter ending September 2025.

Investors are now waiting to see what the data for the quarter ending December 2025 will hold.

Looking at the core financials, the Sales took a hit after good growth in FY23. EBITDA looks like an area of concern for the company with operating losses mounting in the last few years. Net profits also fell after FY23 but have shown a good jump in FY25.

YearFY20FY21FY22FY23FY24FY25
Sales/Rs Cr499416498921610555
EBITDA/Rs Cr1594-21-22-27
Profits/Rs Cr507917621148157

The share price of GOCL Corporation Ltd was around Rs 205 in January 2021 and as on 9th January 2026 it was Rs 276, which is a small jump in 5 years.

At the current price, the stock is trading at a discount of about 60% from its all-time high of Rs 700.

The company’s stock is trading at a PE of 12, which is half of the current industry median which is 24x. The 10-Year median PE for the company is 26x, which is same as the industry median for the same period.

Strategic Pivot: Swapping Explosives for Power

In November 2025, GOCL sold its subsidiary, IDL Explosives Ltd, to Apollo Defence Industries, marking the final exit from the explosives and detonators portfolio. Which means that the company’s mining and chemicals history that investors were interested in is largely gone.

However, in December 2025 the company’s board approved a scheme of merger to absorb Hinduja National Power Corporation Limited (HNPCL) into GOCL. This brings a large 1,040 MW Thermal Power Plant under GOCL’s direct ownership.

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So, while the explosives business is gone, GOCL is transforming from a chemical/explosives company into an important energy player, which will completely change its revenue profile and asset base in the coming years. A fascinating ride to watch.

Future Multibaggers or Value Traps?

GNFC and GOCL Corporation are two debt-free small caps offering dividend yields above 3.5%, significantly higher than the industry median. Backed by the Gujarat of Government and the Hinduja Group respectively, these companies are undergoing significant transitions, with GOCL pivoting from explosives to a 1,040 MW energy portfolio.

With virtually zero debt, big backing, modest PE and high dividend yields these stocks have the signs one looks for when looking for potential value stocks.

What will be a fascinating ride to watch is if these stocks bounce back from what was a bad couple of years and continue their journey to being a potential multibagger. Only time can tell. But for now, adding them to a watchlist and following them closely is a good plan.

Disclaimer:

Note: We have relied on data from www.Screener.in and www.trendlyne.com 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. 

Suhel Khan has been a passionate follower of the markets for over a decade. During this period, He was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.

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

The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein.  The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors.  Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.