Nextracker Inc. Class A Common Stock (NXT)

Interest coverage

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	587,118	357,026	267,216
Interest expense (ttm)	US$ in thousands	2,122	1,654	1,654
Interest coverage		276.68	215.86	161.56

March 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $587,118K ÷ $2,122K
= 276.68

The interest coverage ratio for Nextracker Inc. Class A Common Stock has shown a positive trend over the last three quarters, increasing from 161.56 in September 30, 2023, to 215.86 in December 31, 2023, and further to 276.68 in March 31, 2024. This indicates that the company's ability to cover its interest expenses with its operating income has significantly improved.

A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations from its operating earnings, indicating a lower risk of default on its debt. Nextracker Inc.'s increasing interest coverage ratio may signal improving financial health and efficiency in managing its debt-related expenses, which could be viewed positively by investors and creditors.