 "Corporate sector's interest coverage ratio rises to 2.4 times in Q2FY18")
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.
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.
One subscription. Two world-class reads.
Already subscribed? Log in
Subscribe to read the full story →*Subscribe to Business Standard digital and get complimentary access to The New York Times
Smart Quarterly
₹900
3 Months
₹300/Month
SAVE 25%
Smart Essential
₹2,700
1 Year
₹225/Month
SAVE 46%
*Complimentary New York Times access for the 2nd year will be given after 12 months
Super Saver
₹3,900
2 Years
₹162/Month
Subscribe
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Exclusive premium stories online
Over 30 premium stories daily, handpicked by our editors
Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share
Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor
Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements
Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app
SAVE 25%