Ltd’s report said the total stressed debt pile of companies was ₹15 trillion as of September quarter, down 37% from the year-ago period. In many cases, even large companies have reported low interest cover ratio for as much as one whole year. Nevertheless, the drop in stressed debt augurs well for Indian banks’ asset quality. For stressed debt levels to decline further, companies will need to see sustained revenue recovery that goes beyond the current expected festival boost. While the jury is still out on sustained stressed debt reduction, the odds of further improvement seem higher now.

Source: Mint November 20, 2020 12:00 UTC