Kennametal Inc (KMT)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 156,934 | 182,275 | 175,170 | 172,027 | 183,261 | 184,424 | 193,500 | 198,013 | 198,395 | 203,751 | 213,010 | 227,398 | 238,298 | 237,745 | 222,698 | 228,769 | 182,335 | 179,018 | 221,841 | 149,047 |
| Interest expense (ttm) | US$ in thousands | 24,930 | 24,952 | 25,516 | 26,183 | 26,472 | 27,322 | 28,292 | 28,460 | 28,497 | 28,097 | 26,786 | 26,231 | 25,914 | 25,769 | 40,261 | 42,118 | 46,375 | 51,143 | 38,112 | 37,850 |
| Interest coverage | 6.29 | 7.31 | 6.87 | 6.57 | 6.92 | 6.75 | 6.84 | 6.96 | 6.96 | 7.25 | 7.95 | 8.67 | 9.20 | 9.23 | 5.53 | 5.43 | 3.93 | 3.50 | 5.82 | 3.94 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $156,934K ÷ $24,930K
= 6.29
The interest coverage ratio of Kennametal Inc. demonstrates notable variability over the analyzed period. In fiscal year 2020, the ratio experienced fluctuations from 3.94 at the end of September 2020 to a peak of 5.82 at the end of December 2020, indicating periods of improved ability to cover interest expenses. The ratio then declined to 3.50 by the end of March 2021 before recovering to approximately 3.93 in June 2021, and subsequently rising to higher levels such as 5.43 in September 2021 and 5.53 in December 2021.
A significant increase is observed in the fiscal year 2022, with the ratio reaching 9.23 in March 2022 and remaining elevated at 9.20 in June 2022, signaling enhanced earnings capacity relative to interest obligations. This elevated level persisted through September 2022 at 8.67, and a gradual decline ensued, with the ratio recorded at 7.95 in December 2022 and subsequent measurements of approximately 7.25 in March 2023 and 6.96 in June and September 2023.
From late 2023 into mid-2024, a slight downward trend is evident, with the ratio decreasing to 6.84 in December 2023 and 6.75 in March 2024, before marginally increasing again to 6.92 in June 2024 and slightly decreasing to 6.57 in September 2024. As of the latest data, the ratio stands at 6.87 in December 2024 and continues to be stable around 6.29 to 7.31 in the first half of 2025.
Overall, the interest coverage ratio indicates that Kennametal Inc. maintained generally adequate capacity to meet its interest obligations throughout the period, with periods of heightened solvency reflected in the 9+ ratio during 2022 and early 2023. The ratios consistently remain above or near 6, implying a comfortable margin of safety, although the slight downward trend in recent periods suggests the need for ongoing attention to earnings relative to interest expenses.