The Economic Times

Corporate debt-servicing capacity improves, but share of vulnerable firms rises in Q4 FY26: RBI

Indian companies are showing improved debt-servicing capabilities, with the interest coverage ratio reaching a two-year high of 6.5 in March 2026. This indicates a stronger ability to meet interest payments from operating profits. However, a concerning rise in financially vulnerable firms, whose profits can't cover interest, was also noted. Despite this, the overall debt burden remains manageable, and corporate leverage is declining.