Casting a shadow: India Inc earnings feel the squeeze of interest costs

The 271 companies in our sample together spent Rs 21,183 crore on interest expenses in Q1FY24 up from Rs 15,552 crore a year ago and Rs 20,498 crore in Q4FY23

Rising interest costs have become one of the biggest headwinds for corporate earnings. Interest expenses are now the fastest-growing cost head for India Inc and are weighing down corporate earnings despite a softening of raw material and energy costs in recent quarters.
 

The combined interest expenses of the 271 listed companies, excluding banking, financial services and insurance (BFSI) and information technology (IT) services, were up 36.2 per cent year-on-year (YoY) in the 2023-24 (FY24) April-June quarter (first quarter, or Q1), growing at the fastest pace in three years. In contrast, manufacturers reported a sharp deceleration in raw material and energy