Tech Mahindra (BOM:532755) Interest Coverage : 16.18 (As of Mar. 2024)

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What is Tech Mahindra Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Tech Mahindra's Operating Income for the three months ended in Mar. 2024 was ₹9,464 Mil. Tech Mahindra's Interest Expense for the three months ended in Mar. 2024 was ₹-585 Mil. Tech Mahindra's interest coverage for the quarter that ended in Mar. 2024 was 16.18. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Tech Mahindra's Interest Coverage or its related term are showing as below:

BOM:532755' s Interest Coverage Range Over the Past 10 Years
Min: 8.02 Med: 44.41 Max: 122.87
Current: 8.02

BOM:532755's Interest Coverage is ranked worse than
71.28% of 1598 companies
in the Software industry
Industry Median: 29.35 vs BOM:532755: 8.02

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Tech Mahindra Interest Coverage Historical Data

The historical data trend for Tech Mahindra's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Tech Mahindra Interest Coverage Chart

Tech Mahindra Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

Interest Coverage

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28.81

38.11

46.51

18.65

8.02

Tech Mahindra Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Interest Coverage	Get a 7-Day Free Trial															16.39	7.45	6.22	6.03	16.18

Competitive Comparison of Tech Mahindra's Interest Coverage

For the Information Technology Services subindustry, Tech Mahindra's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Tech Mahindra's Interest Coverage Distribution in the Software Industry

For the Software industry and Technology sector, Tech Mahindra's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Tech Mahindra's Interest Coverage falls into.

Tech Mahindra Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Tech Mahindra's Interest Coverage for the fiscal year that ended in Mar. 2024 is calculated as

Here, for the fiscal year that ended in Mar. 2024, Tech Mahindra's Interest Expense was ₹-3,922 Mil. Its Operating Income was ₹31,474 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹7,734 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2024 )	/	Interest Expense (A: Mar. 2024 )
	=	-1	*	31474	/	-3922
	=	8.02

Tech Mahindra's Interest Coverage for the quarter that ended in Mar. 2024 is calculated as

Here, for the three months ended in Mar. 2024, Tech Mahindra's Interest Expense was ₹-585 Mil. Its Operating Income was ₹9,464 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹7,734 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	9464	/	-585
	=	16.18

The higher the ratio, the stronger the company's Financial Strength is.

Tech Mahindra (BOM:532755) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Tech Mahindra Interest Coverage Related Terms

Thank you for viewing the detailed overview of Tech Mahindra's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Tech Mahindra (BOM:532755) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Tech Mahindra Ltd (BOM:532755) » Definitions » Interest Coverage

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TECHM:India

Address

Plot No. 1, Phase III, Rajiv Gandhi Infotech Park, Hinjewadi, Pune, MH, IND, 411 057

Website

https://www.techmahindra.com

Tech Mahindra Ltd is an IT services and consulting company in India. It offers a variety of technology solutions and services in addition to business process services. Its segments are Information Technology and Business Processing Outsourcing. The technology solutions include helping companies engage in cloud software, mobile solutions, network services, cybersecurity, and a variety of other options. The business process service is offered across various industries including telecom, financial services, retail, energy, hospitality, high-tech, agriculture, and food beverage. The company's approach includes cost reduction, process optimization, and ownership through automation and productivity improvements. Tech Mahindra generates approximately half of its revenue from the United States.

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