No deleveraging is visible: India Inc

MUMBAI: A mid-season analysis of India Inc's balance sheets for the September '12 quarterly results so far reveals that on an average India Inc's leveraging has gone up faster in last six months as compared to growth in the shareholders' net worth. This has resulted in an increase in the India Inc's overall leverage.

An analysis of half-yearly balance sheets of 661 Indian companies, excluding banking and finance, shows the short and longterm debt of all the companies increased 23.2% to Rs 685937.9 crore in last six months. In comparison the increase in the net worth of the same set of companies was lower at 8.5%. The resultant debt-equity ratio has risen to 0.63 at end September '12 from 0.55 of March '12.

If adjusted for cash & cash equivalents, the net debt-equity ratio has increased to 0.45 at end Sept '12 from 0.36 of March '12.

The solvent extraction industry saw the biggest jump in debt, as the gross debt of 9 companies from the sector more than doubled in just six months. This was entirely due to a huge jump in Gokul Refoil's short term borrowings.

On the other hand, the biggest fall in debt was reported by sugar industry, as gross debt nearly halved for six companies put together. Although all the sugar companies reported a drop in their debt levels, almost 70% drop in Shree Renuka Sugar's debt was the main reason of such sharp fall.

Nevertheless, with just a few more days from the results season remaining, one would have to wait to see the full picture once all the companies have published their results.