India Incs Interest Burden Down 8.2% In 2003-04

Updated: May 31 2004, 05:30am hrs
A study of 350 major private sector companies (sales above Rs 8 crore) reveals that the interest expense to sales ratio has declined to 2.4 per cent in 2003-04 from the level of 3.4 per cent in 2002-03.

The aggregate interest cost of these companies during 2003-04 is Rs 6,875 crore, which is 18.2 per cent lower than the year ago figure of Rs 8,409 crore. This study attempts to determine the trends in interest-net sales ratio of 25 industries comprising 350 companies.

The top 10 companies in the descending order of interest-sales ratio during 2003-04 are ATV Projects (130.7 per cent), Sterling Holiday (68.6 per cent), Hindoostan Spg&Wvg (35.6 per cent), Kamat Hotels (28.6 per cent), Usha Ispat (26.5 per cent), Hotel Leela Venture (25.6 per cent), Gujarat Industries Power (23.6 per cent), Birla VXL (21.7 per cent), Thiru Arooran (19.7 per cent) and Viceroy Hotels (19.3 per cent). As many as 261 companies have witnessed a fall in the ratio, while 84 companies have shown a rise in the ratio. Five companies maintained the same ratio in both the periods under review.

A significant fall in the ratio was witnessed in the case of Tata Motors from 2.6 per cent during 2002-03 to 1.0 per cent during 2003-04, Tisco (3.5 per cent to 1.1 per cent), Gujarat Ambuja Cements (6.1 per cent to 4.3 per cent), Spic (10.9 per cent to 4.3 per cent), Arvind Mills (10.4 per cent to 7.9 per cent) and Jindal Steel&Power (8.1 per cent to 5.2 per cent).

A significant improvement in the ratio was observed in the case of Uttam Galva Steels (5.7 per cent to 6.3 per cent), Hindustan Motors (6.1 per cent to 7.6 per cent), JCT (3.9 per cent to 4.4 per cent) and Garden Silk Mills (1.7 per cent to 2.4 per cent).