Weaker Q3 Earnings Hit Mfg Firms' Ability To Repay Debt
Mint Bangalore
|February 26, 2025
Rising input costs impacted profits in industries such as textiles, affecting the ICR
The ability of India's manufacturing companies to repay debt worsened in the three months through December due to weak earnings, even as the quantum of interest outgo dropped. Data released by the Reserve Bank of India (RBI) showed that the interest coverage ratio (ICR) of manufacturing companies declined to 7.6 in the December quarter, down 30 basis points (bps) from the previous quarter. Interest coverage ratio is the ratio of earnings before interest and tax to interest expenses, a measure of the debt servicing capacity of a company.
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