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BANKBARODA

Reputation: 642,681 • Nov 30, 2023 12:31 AM

Corporate debt servicing improves despite higher interest cost

Despite a 60 basis point (0.60 percent) increase in policy rates between September 2022 and September 2023, corporate debt servicing, as measured by the interest coverage ratio (ICR), improved from 4.49 in September 2022 to 5.64 in September 2023. This suggests that higher lending rates have not negatively impacted the debt-servicing capacity of Indian firms. The interest coverage ratio is a measure of a firm's ability to service its debt.

The Economic Times

𝗡𝗲𝘄𝘀 𝗦𝘂𝗺𝗺𝗮𝗿𝘆
• Despite a 60 basis point increase in policy rates, corporate debt servicing in India has improved, with the interest coverage ratio increasing from 4.49 to 5.64.
• This improvement is due to lower growth in interest costs and higher growth in profits.
• The 10 largest indebted sectors have also seen an improvement in their interest coverage ratio.
https://economictimes.indiatimes.com/news/economy/indicat...
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