HFCL (BOM:500183) Interest Coverage : 4.18 (As of Mar. 2024)

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What is HFCL 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. HFCL's Operating Income for the three months ended in Mar. 2024 was ₹1,656 Mil. HFCL's Interest Expense for the three months ended in Mar. 2024 was ₹-397 Mil. HFCL's interest coverage for the quarter that ended in Mar. 2024 was 4.18. The higher the ratio, the stronger the company's financial strength is.

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

BOM:500183' s Interest Coverage Range Over the Past 10 Years
Min: 3.39 Med: 6.25 Max: 10.08
Current: 3.39

BOM:500183's Interest Coverage is ranked worse than
78.47% of 1584 companies
in the Hardware industry
Industry Median: 12.55 vs BOM:500183: 3.39

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

HFCL Interest Coverage Historical Data

The historical data trend for HFCL'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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HFCL Interest Coverage Chart

HFCL Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

Interest Coverage

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6.54

4.99

8.07

3.52

3.39

HFCL 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															3.51	3.46	3.18	2.67	4.18

Competitive Comparison of HFCL's Interest Coverage

For the Communication Equipment subindustry, HFCL'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.

HFCL's Interest Coverage Distribution in the Hardware Industry

For the Hardware industry and Technology sector, HFCL's Interest Coverage distribution charts can be found below:

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

HFCL 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.

HFCL'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, HFCL's Interest Expense was ₹-1,473 Mil. Its Operating Income was ₹4,998 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹1,783 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Mar. 2024 )	/	Interest Expense (A: Mar. 2024 )
	=	-1	*	4997.8	/	-1472.8
	=	3.39

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

Here, for the three months ended in Mar. 2024, HFCL's Interest Expense was ₹-397 Mil. Its Operating Income was ₹1,656 Mil. And its Long-Term Debt & Capital Lease Obligation was ₹1,783 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	1656.2	/	-396.5
	=	4.18

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

HFCL (BOM:500183) 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 .

HFCL Interest Coverage Related Terms

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

HFCL (BOM:500183) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » HFCL Ltd (BOM:500183) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

HFCL:India

Address

8, Commercial Complex, Masjid Moth, Greater Kailash II, New Delhi, IND, 110 048

Website

https://www.hfcl.com

HFCL Ltd is an Indian manufacturer and exporter of optical fibre cables and broadband equipment for the telecommunication industry. Firm business segments include Telecom Products and Turnkey Contracts Services. Telecom Product segment produces optical fibre cable, optical fibre and telecom equipment. Turnkey Contracts segment is engaged in delivering telecom infrastructure and communication network systems for Telecom Operators, Defence Services, Railways, Safe and Smart Cities etc. The firm's products and solutions include Futureline, Aerial, Armoured, Microwave Radios, FTTx, GPON, Optical transmission, etc. It generates substantial revenue from the sale of turnkey projects and related activities.

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