Tracking corporate sector health Interest cover up, but stress remains. The corporate sector's interest coverage ratio has improved to 2.4 times in Q2FY18, finds a new study by Credit Suisse. But the percentage of companies with an interest cover of less than 1 continues to remain high at 40 per cent.
While this is marginally lower than the first quarter estimate of 42 per cent, the decline in the ratio is largely due to the exit of Tata Motors from the list. The share of companies that are chronically stressed — Credit Suisse defines them as those having an interest cover of less than 1 for the past four quarters — has increased to 38 per cent. Companies in the metals, power and telecom sectors accounted for more than 40 per cent of companies with an interest cover of less than 1.