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Rate hikes may not affect Indian firms’ ability to service debt

Rate hikes may not affect Indian firms’ ability to service debt
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First Published: Wed, May 04 2011. 11 19 PM IST
Updated: Wed, May 04 2011. 11 19 PM IST
The expected increase in interest rates due to the Reserve Bank of India’s policy action is unlikely to affect Indian industry’s ability to service debt.
Also see | Rate hikes may not affect Indian firms’ ability to service debt (PDF)
Interest/sales ratio has risen from a year ago, but is still comfortable compared with the start of fiscal 2010. However, earnings growth is likely to feel the pinch, as rising interest costs are eating into operating profits, even as margins are on the decline.
Graphic by Yogesh Kumar/Mint
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First Published: Wed, May 04 2011. 11 19 PM IST