shows the large-caps failed to demonstrate a rebound in net profit margins compared with last year figure and mid-caps witnessed 22 bps (basis points) y-o-y gain.
Further, the interest coverage ratio- a gauge of a company\'s ability to cater interest costs of its outstanding debt - of the mid-caps remained unchanged whereas that of the largecap stocks dipped by 80 bps.
Generally, the operating performance of large-caps which have sizable production capacities, tend to get affected by higher raw material costs. On other hand, mid and small size companies that have to raise capital at a higher interest rate, see a decline in their net profits in a high interest rate environment. The increase in working capital requirement further jacks up their interest cost compared to large-caps.
For the analysis we bifurcated the set of companies according to their market-cap; companies with a market-cap of more than R5,000 crore was deemed as large-caps and those with a marke-cap between of R2,000 to R5000 crore were grouped as mid-caps.