Covid-19 lockdown: India Inc more vulnerable now than in recession of 2008

Profitability and cash reserves have halved since the global financial crisis

Corporate India now has a much lower financial capacity to absorb large losses, which are arising out of the Covid-19 lockdown, than in 2008, when the global financial crisis struck.
 

India’s top listed companies now have higher debt, while profitability, accumulated earnings, and cash reserves are much lower than what they were on the eve of the Lehman crisis.
 

To put it simply, India Inc’s liabilities have grown at a faster pace than earnings and revenues in recent years, eroding their ability to absorb a demand shock from the Covid-19 lockdown.
 

In contrast, the 2008 crisis was preceded by years