CRISIL Research has come out with its report on interest coverage. According to the research firm the interest coverage ratio of companies in the S&P CNX 500 Index (ex BFSI1 and public sector oil marketing companies, totaling to 420 companies) has dipped to a five-year low on account of high interest rates and a decline in operating profits.
The median interest coverage ratio has fallen to 4.8 times in July-September 2011 quarter against 7.8 times in July-September 2010 quarter. Average interest coverage2 for the past five years was 8.4 times. While the 4.8 times interest coverage is still healthy, the magnitude of drop over the past two quarters is high. This has led to higher risk aversion towards capital spendsDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
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