Genpact Limited (G)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 702,061 | 630,857 | 502,151 | 508,999 | 438,717 |
| Interest expense | US$ in thousands | 47,214 | 1,332 | 1,532 | 2,538 | 2,454 |
| Interest coverage | 14.87 | 473.62 | 327.77 | 200.55 | 178.78 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $702,061K ÷ $47,214K
= 14.87
Genpact Limited's interest coverage ratio has shown a strong upward trend over the past five years. Starting at 178.78 in 2020, the ratio increased to 200.55 in 2021, further rose to 327.77 in 2022, and continued to improve significantly to 473.62 in 2023. However, there was a notable decline in 2024, with the interest coverage dropping to 14.87.
The substantial increase in the interest coverage ratio from 2020 to 2023 indicates that Genpact has been generating sufficient operating income to cover its interest expenses comfortably. This trend suggests the company has been effectively managing its debt obligations and is in a strong financial position.
The significant decrease in interest coverage in 2024 may raise concerns as it indicates a potential strain on the company's ability to cover its interest expenses with operating income. This decline warrants further investigation to understand the reasons behind the sudden deterioration and assess the impact on Genpact's overall financial health and solvency.
Peer comparison
Dec 31, 2024