Zero debt, high ROCE, solid dividends: 2 gems in Radhakishan Damani’s portfolio

Radhakishan Damani, known as the retail king of India, who changed the retail space in India with DMart, needs no introduction. Even the super investors of India follow him and his moves closely. All while the average investors aspire to have his stock picking skills. A true value investor who is not shaken by temporary market mood swings, Damani believes in the Warren Buffett way of buying a stock and sticking to it over the years. Currently, he holds 12 stocks in his portfolio, worth almost Rs 180,000 cr. Of course, the biggest one of them is his home turf, Avenue Supermarts Ltd (Dmart) worth over Rs 175,000 cr. What has caught the attention of many investors recently is his 2 long held high dividend yield stocks. These “cash cows” have dividend yields that make their peers envious. And both these stocks are trading near their 52-week lows, creating what could possibly be a big opportunity. But is it really? #1 Advani Hotels: The Goa Gem Offering a 3.5% Yield Incorporated in 1987, Advani Hotels and Resorts India Ltd is in the business of hoteliering. With a market cap of Rs 501 cr, the company has a current dividend yield of 3.5%. The 5-year average dividend yield for the company is 3%. The company is almost debt free and maintains a healthy dividend payout ratio of 85%. Also, the company has a current ROCE (Return on Capital Employed) of 45%, while the industry median is just 12%. In simple words, this means that for every Rs 100 the company uses as capital, it makes a profit of Rs 45 on it, while its peers in the same industry average just about 12%. Radhakishan Damani has held a stake in the company atleast since December 2015 (as per the oldest data available in trendlyne.com), and currently holds a 4.2% stake worth Rs 21 cr. Let’s look at the financials to see if we can find out what has kept Damani interested in the company for a decade. The company’s sales have grown from Rs 70 cr in FY20 to Rs 107 cr in FY25, logging in a compound growth rate of 9% in the last 5 years. Between April and September 2025, the company recorded sales of Rs 35 cr. The EBITDA (earnings before interest, taxes, depreciation, and amortization) for Advani Hotels grew from Rs 17 cr in FY20 to Rs 35 cr in FY25, recording a 16% CAGR. For the quarter ending June 2025, EBITDA of Rs 3 cr was logged, but for the quarter ending September 2025, a loss of Rs 1.2 cr was recorded. As for the net profits, the company has logged in a compound growth of 19% from Rs 11 cr in FY20 to Rs 26 cr in FY25. For the quarter ending June 2025, the net profits were Rs 2.4 cr, but for the quarter ending September 2025, the company logged losses of almost Rs 1 cr. Hotels is a cyclical business which the third quarter being the strongest. Depending on how well the season goes for the company, one could make a call on the sustainability of the high dividend yield. Meanwhile, the share prices for Advani Hotels & Resorts India Ltd were around Rs 30 in November 2020, and as on 27th November 2025 it was Rs 54. The company’s 52-week low is Rs 50, so the current price is remarkably close to it. As for valuations, the company’s current PE is 20x, while the current industry median is 38x. The 10-year median PE for Advani Hotels & Resorts is however 27x and the industry median for the same period is 36x. In the annual report for FY25, Chairman & Managing Director, Sunder Advani said, “We will continue our policy of not requiring debt financing for planned improvements, maintaining our strong balance sheet. Our commitment to rewarding shareholders remains steadfast – we are recognised as one of the highest dividend-paying companies as a proportion of net profits. Our healthy dividend payout ratio of 95.9% reflects our confidence in sustainable cash generation and our commitment to sharing success with our investors.” #2 VST Industries: The Debt-Free Dividend Giant Originally Vazir Sultan Tobacco Company, VST Industries Ltd incorporated in 1930, is an associate of British American Tobacco Plc., a global leader in the cigarette industry which is into manufacturing and trading of Cigarettes, Tobacco and Tobacco products. With a market cap of Rs 4,306 cr, VST is the 3rd largest player in the domestic cigarette market, with a significant presence in West Bengal, Andhra Pradesh, Telangana, Bihar, and UP with an 8% market share based on volume. Its cigarette brand Total is among the top 10 brands in the industry. As per Trendlyne, Damani has held a stake in VST since March 2016, either in his own portfolio or through his companies, Bright Star Investments Pvt. Ltd or Derive Trading and Resorts Pvt. Ltd. He currently holds 29% stake overall worth Rs 1,235 cr. VST Industries has a current ROCE of an impressive 21%, which is the same as the industry median. The company has a current dividend yield of 3.94% which is much higher than the current industry median of 0.6%. The company is debt free, and it maintains a healthy dividend payout ratio of 76%. Looking at the financials, the company’s sales jumped from Rs 1,239 cr in FY20 to Rs 1,398 cr in FY25 which is a compound jump of a small 2%. And between April and September 2025, the company has logged sales of Rs 634 cr already. EBITDA however has seen a steep decline in the recent years. For the two quarters ending June 2025 and September 2025, the company has recorded a combined EBITDA of Rs 156 cr. When it comes to the Net profits, VST has seen almost flat or linear performance in the last 5 years. By the quarter ending September 2025, the company had recorded net profits of Rs 115 cr. The share price of VST Industries Ltd was around Rs 325 (adjusted for bonus issues) in November 2020 which as on 27th of November 2025 has dropped to Rs 254. The stock is trading closer to its 52-week low price of Rs 235 and at a discount of 48% from its all-time high price of Rs 487. As for valuations, the stock is trading at a PE of 19x, while the industry median is 27x. The 10-year median PE of VST is 20x and the industry median for the same period is 22x. Damani’s Dividend Darlings For 2026 These two decade-long holdings of Damani we saw today are grabbing attention of smart investors with their debt free status and high dividend yields. After all, when companies do not shy away from giving back to its investors, it is always a green flag. No wonder Damani has trusted both the stocks for almost a decade. The financials for both companies give different signals. While Advani Resorts has recorded losses in operating and net profits in the recent quarter, VST Industries has not logged any losses, even though the growth may be flat. But they both have one thing in common, which is the will to give back to investors by means of dividends. The big question is if these dividend darlings of Damani will be able to sustain these dividend yields and better financial performance in 2026? Only time will tell, but given that Damani hasn’t lost trust on them, it would be smart to add them to a watchlist and follow them closely. 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. Disclaimer: 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.