Interest expense

What the company pays on its borrowings. A purely financial line - it has nothing to do with how well operations are running, only with how the business is financed.

How to read it

Interest expense = Outstanding debt × Average interest rate × (period / 12)

So a company with ₹400 cr debt paying 9% interest reports about ₹9 cr interest per quarter and ₹36 cr per year.

Interest coverage - the ratio that matters

Interest coverage ratio = EBIT ÷ Interest expense

This tells you how many times over the operating profit can pay the interest bill. A general rule of thumb:

Above 5x - comfortable
2x to 5x - manageable, but watch for revenue softness or rate rises
1x to 2x - fragile; a bad quarter can put the company into distress
Below 1x - operating profit can't even cover interest. Real trouble.

What to watch quarter to quarter

Interest going up while debt stays flat → refinancing at a higher rate; rate cycle is biting.
Interest going up because debt rose → either a working-capital squeeze (short-term borrowing went up) or a deliberate capex programme. Check the balance sheet to know which.
Interest falling → debt being paid down (good) or refinancing at a lower rate (good) or capitalised interest on a major project (technically fine but worth understanding).