The recently released September quarter results clearly show that India's large companies are in a good financial position, even though their profit and revenue growth has slowed down. According to an analysis by Moneycontrol, the interest coverage ratio (ICR) of large, medium and small companies remains at a safe level of 4-5, albeit slightly lower than the previous quarter.

This means that companies are able to pay interest comfortably, even though the debt pressure on them has increased. In the last economic cycle, when interest rates rose and the debt burden increased, companies were unable to withstand this pressure, but this time companies are managing their debt well.

ICR is an important financial parameter, which tells how easily a company can pay interest from its operating profit. In the September quarter, the ICR of 87 BSE midcap companies and 543 BSE smallcap companies has come down to 4.37 and 4.32 respectively. However, it is still within the safe limit. At the same time, the ICR of BSE 500 companies has come down from 7.12 to 6.48. Small companies have also been as successful in repaying loans on a large scale as big companies are getting success. The reason for this is that they have ultra-economic funding avenues. Companies are now reducing their promoter stake and also raising capital through preferential issues and qualified institutional placements (QIPs). This has put them in a position to repay good debt despite declining profits and slow revenue growth. So far in 2024, companies have raised more than Rs 70,000 crore, while last year this figure was Rs 67,173 crore. Apart from this, this year 68 companies have raised more than Rs 1.04 lakh crore through QIPs, which is much more than last year's Rs 49,435 crore. Experts believe that the strong bull market in the last three years has had a positive impact on companies. Due to this, they have been able to avoid bank loans and are managing their debt well by raising funds through QIPs and preferential issues. India's major stock indices such as Sensex and Nifty have seen a jump of 32% in the last one year, while the midcap and smallcap indices have gained up to 83% and 93%. However, in the future, due to the emerging global crisis and rising commodity prices, it may be a bit difficult for companies to repay loans. Experts believe that if global political tensions increase after Donald Trump's victory in the US, then Indian companies may have to face pressure. According to the latest RBI data, bank credit growth has come down to 14.1% till October, while it was more than 16% in March. ICRA estimates that bank credit growth will be between Rs 19-20 lakh crore in 2024-25, which will be lower than last year's Rs 22.3 lakh crore. The data given in this report shows that revenue growth for BSE midcap companies has remained in single digits for seven consecutive quarters and their net profit has declined for the second consecutive quarter. At the same time, the performance of BSE smallcap companies has also not been very good, where revenue growth has been in single digits and net profit has increased the slowest. Overall, Indian companies are able to repay their debts despite slow growth and increasing pressure and this is what keeps their financial health strong.