Financial stress spreads in India Inc despite improvement in profitability

85 firms had interest obligations higher than their operating profits in FY17, up from 67 in FY16

The list of financially stressed corporate entities grew longer in 2016-17 despite a general improvement in corporate profitability. 

Nearly 11 per cent of the country’s largest listed companies, excluding banks and financial companies, could not service interest payments on their loans in 2016-17, up from nine per cent in 2015-16. These companies accounted for around a fifth of all gross corporate debt at the end of 2016-17.

In all, 85 companies had inadequate profits — operating profits lower than interest obligations — in 2016-17, up from 67 companies in 2015-16. These companies reported a combined operating profit of Rs 12,000