RBI Reports Improved Corporate Debt-Servicing Capacity Amid Rising Vulnerable Firms in Q4 FY26
The Reserve Bank of India's Financial Stability Report for Q4 FY26 highlights an improvement in the corporate sector's debt-servicing capacity, with the interest coverage ratio rising to 6.5, its highest in two years. This reflects stronger gross profits relative to interest expenses. However, the share of financially vulnerable firms, with an interest coverage ratio below one, increased to 18.5%. Despite this, the overall debt burden remains manageable, supported by robust balance sheets and declining corporate leverage.