Torrent Power (BOM:532779) Interest Coverage : 2.95 (As of Dec. 2023)

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What is Torrent Power 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. Torrent Power's Operating Income for the three months ended in Dec. 2023 was ₹6,953 Mil. Torrent Power's Interest Expense for the three months ended in Dec. 2023 was ₹-2,355 Mil. Torrent Power's interest coverage for the quarter that ended in Dec. 2023 was 2.95. The higher the ratio, the stronger the company's financial strength is.

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

BOM:532779' s Interest Coverage Range Over the Past 10 Years
Min: 1.19 Med: 2.34 Max: 4.51
Current: 3.77

BOM:532779's Interest Coverage is ranked better than
56.27% of 327 companies
in the Utilities - Independent Power Producers industry
Industry Median: 3.24 vs BOM:532779: 3.77

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

Torrent Power Interest Coverage Historical Data

The historical data trend for Torrent Power'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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Torrent Power Interest Coverage Chart

Torrent Power Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Interest Coverage

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2.24

2.43

2.96

3.73

4.51

Torrent Power Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial															4.92	5.22	3.75	3.56	2.95

Competitive Comparison of Torrent Power's Interest Coverage

For the Utilities - Independent Power Producers subindustry, Torrent Power'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.

Torrent Power's Interest Coverage Distribution in the Utilities - Independent Power Producers Industry

For the Utilities - Independent Power Producers industry and Utilities sector, Torrent Power's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Torrent Power's Interest Coverage falls into.

Torrent Power 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.

Torrent Power's Interest Coverage for the fiscal year that ended in Mar. 2023 is calculated as

Here, for the fiscal year that ended in Mar. 2023, Torrent Power's Interest Expense was ₹-8,032 Mil. Its Operating Income was ₹36,256 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹89,416 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2023 )	/	Interest Expense (A: Mar. 2023 )
	=	-1	*	36255.9	/	-8032
	=	4.51

Torrent Power's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Torrent Power's Interest Expense was ₹-2,355 Mil. Its Operating Income was ₹6,953 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹0 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	6952.8	/	-2354.9
	=	2.95

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

Torrent Power (BOM:532779) 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 .

Torrent Power Interest Coverage Related Terms

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

Torrent Power (BOM:532779) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Independent Power Producers » Torrent Power Ltd (BOM:532779) » Definitions » Interest Coverage

Traded in Other Exchanges

TORNTPOWER:India

Address

Samanvay, 600, Tapovan, Ambawadi, Ahmedabad, GJ, IND, 380015

Website

https://www.torrentpower.com

Torrent Power Ltd is an Indian utility company engaged in the business of power generation, transmission, and distribution. Both by itself and through its subsidiaries, Torrent Power operates a portfolio of gas, combined cycle, coal, wind, and solar power plants. The company's gas-fired facilities constitute most of its energy-producing capacity. Torrent Power generates the vast majority of its revenue from the supply of power generated by its facilities and transmitted through its power grids to areas of Western and Northern India. Its sales are fairly evenly divided among residential, commercial, low tension and high tension consumers. The low tension customer class would include smaller manufacturing units, while high tension would be composed of heavier industrial entities.

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