The a2 Milk CoASX:A2M +1.27%82 Interest Coverage is 309.35 as of Dec. 2025, which is 51% below its 10-year median of 630.55. GuruFocus rates ASX:A2M with a GF Score™ of 82/100 and a GF Value™ of A$6.67 (Fairly Valued). The stock has 3 warning signs investors should review. Among 1,510 Consumer Packaged Goods companies, The a2 Milk Co ranks better than 89.8% on this metric.
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. The a2 Milk Co's
Operating Income
for the
six
months ended in Dec. 2025 was A$119 Mil. The a2 Milk Co's Interest Expense for the
six
months ended in Dec. 2025 was A$-0 Mil.
The a2 Milk Co's interest coverage for the quarter that ended in Dec. 2025 was 309.35.
The higher the ratio, the stronger the company's financial strength is.
Good Sign:
Ben Graham prefers companies' interest coverage to be at least 5. The a2 Milk Co Ltd has enough cash to cover all of its debt. Its financial situation is stable.
The historical rank and industry rank for The a2 Milk Co's Interest Coverage or its related term are showing as below:
ASX:A2M'
s Interest Coverage Range Over the Past 10 Years
Min: 40.71 Med: 630.55 Max: 9221.64
Current: 261.56
ASX:A2M's Interest Coverage is ranked better than 89.8% of 1510
companies
in the Consumer Packaged Goods industry
Industry Median: 8.64
vs ASX:A2M: 261.56
The a2 Milk Co (ASX:A2M) 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 .
The a2 Milk Co Interest Coverage Related Terms
The a2 Milk Co Interest Coverage Historical Data
* Premium members only.
The historical data trend for The a2 Milk Co'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.
For the Packaged Foods subindustry, The a2 Milk Co'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.
The a2 Milk Co Interest Coverage vs Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, The a2 Milk Co's Interest Coverage distribution charts can be found below:
* The bar in red indicates where The a2 Milk Co's Interest Coverage falls into.
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:
* 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.
The a2 Milk Co (ASX:A2M) has a Interest Coverage of 309.35 as of Dec. 2025. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on The a2 Milk Co and its competitors. This is 51% below median its historical median of 630.55. Over the past decade, The a2 Milk Co's Interest Coverage has ranged from 40.71 to 9,221.64. According to the industry distribution chart, The a2 Milk Co ranks #154 out of 1510 companies in the Consumer Packaged Goods industry, placing it in the top 10.2%.
Is The a2 Milk Co's Interest Coverage too high?
The a2 Milk Co's current Interest Coverage of 309.35 is 51% below median its 10-year median of 630.55. Over the past 10 years, this metric has ranged from a low of 40.71 to a high of 9,221.64. The Consumer Packaged Goods industry median Interest Coverage is 8.64. The a2 Milk Co's value of 309.35 is 3480.4% above this industry median. Based on the distribution chart, The a2 Milk Co ranks #154 out of 1510 companies in the Consumer Packaged Goods industry, which is in the top quartile — a strong position relative to peers. Overall, The a2 Milk Co has a GF Score™ of 82/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does The a2 Milk Co's Interest Coverage compare to KHC and GIS?
According to the Consumer Packaged Goods industry distribution chart, The a2 Milk Co ranks #154 out of 1510 companies for Interest Coverage. This places The a2 Milk Co in the top 10% of its industry — outperforming the majority of peers. The industry median Interest Coverage is 8.64. The a2 Milk Co's value of 309.35 is 3480.4% above this benchmark. Historically, The a2 Milk Co's own Interest Coverage has ranged from 40.71 to 9,221.64 over the past decade. While the company's 10-year median is 630.55 vs. the industry median of 8.64, The a2 Milk Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for a Consumer Packaged Goods company?
The median Interest Coverage among Consumer Packaged Goods companies is 8.64, based on 1,510 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The a2 Milk Co's current Interest Coverage of 309.35 is 3480.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on The a2 Milk Co and its competitors. For the Consumer Packaged Goods industry, the median Interest Coverage is 8.64 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The a2 Milk Co's current Interest Coverage is 309.35, which is 51% below median its own 10-year median of 630.55. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The a2 Milk Co stock overvalued right now?
Based on GuruFocus' analysis, The a2 Milk Co (ASX:A2M) is currently considered Fairly Valued. The stock's GF Value™ is A$6.67, compared to a current price of A$7.19 — trading 7.8% above its estimated fair value. The current Interest Coverage is 309.35, which is 51% below median its 10-year median of 630.55 and 3480.4% above the Consumer Packaged Goods industry median of 8.64. The a2 Milk Co's overall GF Score™ is 82/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For The a2 Milk Co (ASX:A2M), the current Interest Coverage is 309.35 as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The a2 Milk Co (ASX:A2M) Overvalued in 2026?
Based on GuruFocus' analysis, The a2 Milk Co stock appears to be overvalued.
The current stock price of A$7.19 is trading 7.8% above its estimated GF Value™ of A$6.67.
GuruFocus considers The a2 Milk Co to be Fairly Valued.
Key valuation signals for ASX:A2M:
Interest Coverage: 309.35 (51% below median its 10-year median of 630.55)
GF Value™: A$6.67 vs. price of A$7.19 (7.8% above fair value)
Industry Position: 3480.4% above the Consumer Packaged Goods median (#154 of 1510)
No single metric tells the full story. See the ASX:A2M stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
A2 Milk is a New Zealand licensor and marketer of fresh milk, infant formula, and other dairy products that lack the A1 beta-casein protein. The firm was founded in 2000 by Corran McLachlan, who developed a genetic test to determine which proteins a cow produces in its milk, and business partner Howard Paterson. The company has been through a tumultuous history of receivership, legal battles, and strategic shifts, but emerged in its current structure in 2006 and listed publicly in March 2013.
82GF Score
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