Bajaj Finserv (BOM:532978) Interest Coverage : 2.07 (As of Mar. 2024)

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What is Bajaj Finserv 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 EBIT by its Interest Expense. Bajaj Finserv's EBIT for the three months ended in Mar. 2024 was ₹106,801 Mil. Bajaj Finserv's Interest Expense for the three months ended in Mar. 2024 was ₹-51,535 Mil. Bajaj Finserv's interest coverage for the quarter that ended in Mar. 2024 was 2.07. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Bajaj Finserv Ltd interest coverage is 2.16, which is low.

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

BOM:532978' s Interest Coverage Range Over the Past 10 Years
Min: 1.89 Med: 2.3 Max: 2.78
Current: 2.16

BOM:532978's Interest Coverage is ranked worse than
96.03% of 428 companies
in the Diversified Financial Services industry
Industry Median: No Debt vs BOM:532978: 2.16

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

Bajaj Finserv Interest Coverage Historical Data

The historical data trend for Bajaj Finserv'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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Bajaj Finserv Interest Coverage Chart

Bajaj Finserv Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

Interest Coverage

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1.89

2.08

2.19

2.38

2.16

Bajaj Finserv 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															2.32	2.27	2.19	2.14	2.07

Competitive Comparison of Bajaj Finserv's Interest Coverage

For the Financial Conglomerates subindustry, Bajaj Finserv'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.

Bajaj Finserv's Interest Coverage Distribution in the Diversified Financial Services Industry

For the Diversified Financial Services industry and Financial Services sector, Bajaj Finserv's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Bajaj Finserv's Interest Coverage falls into.

Bajaj Finserv 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 EBIT is positive, then

Interest Coverage

-1

EBIT

Interest Expense

Else if Interest Expense is negative and EBIT 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.

Bajaj Finserv'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, Bajaj Finserv's Interest Expense was ₹-183,995 Mil. Its EBIT was ₹397,745 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹2,287,817 Mil.

Interest Coverage	=	-1	*	EBIT (A: Mar. 2024 )	/	Interest Expense (A: Mar. 2024 )
	=	-1	*	397745.4	/	-183995.1
	=	2.16

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

Here, for the three months ended in Mar. 2024, Bajaj Finserv's Interest Expense was ₹-51,535 Mil. Its EBIT was ₹106,801 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹2,287,817 Mil.

Interest Coverage	=	-1	*	EBIT (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	106800.5	/	-51535.1
	=	2.07

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

Bajaj Finserv (BOM:532978) 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 .

Bajaj Finserv Interest Coverage Related Terms

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

Bajaj Finserv (BOM:532978) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Diversified Financial Services » Bajaj Finserv Ltd (BOM:532978) » Definitions » Interest Coverage

Traded in Other Exchanges

BAJAJFINSV:India

Address

Off Pune-Ahmednagar Road, 6th Floor, Bajaj Finserv Corporate Office, Viman Nagar, Pune, MH, IND, 411 014

Website

https://www.bajajfinserv.in

Bajaj Finserv Ltd is a non-banking financial services company headquartered in India that engages in lending activities. It services six lending verticals: consumer, small and midsize enterprises, commercial, rural, deposits, and partnerships and services. Bajaj's consumer and rural lending consists of funding solutions for consumer durables, such as vehicles and furniture to personal loans. The commercial lending activities consist of funding for plant and machinery assets and term loans to SMEs. Its mortgage lending activities consist of loans for residential and commercial properties and developer financing, among others. The company operates in India, with most of its revenue coming from Premium and other operating income from the insurance business.

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