🏠 Your EMI Does Not Stop When Salary Gets Cut | Debt to Equity Ratio Explained | India 2026.

本站添加: 2026-05-27

[00:00:01]Namaskar dosto, welcome back to Dutch Talk info. Imagine you earn 1 lakh per month and you take a home loan with EMI of 80,000 per month. One month you lose your job, your salary gets cut and that is rupees 80,000 EMI does not stop. The bank does not care. That is what debt does to a company in a market correction. Revenue falls but the interest payments keep coming every single month. Today I show you the ratio tells you how much debt is dangerous to the company.

[00:00:30]It is called debt to equity ratio and this May 2026 correction, it is the most important number to check. Debt to equity ratio is a simple formula. Total debt divided by total shareholders equity. If a company has 100 crore the debt and rupees 100 crore equity D is 1.0. Equal amounts borrowed money and own money. If D is 0.5 for every one the debt if the company has two of its own money. Financially strong the company funds itself mostly with its own capital. D is 4.0. Every one borrowed money the company borrowed rupees four.

[00:01:02]The company is walking on a tightrope.

[00:01:04]One bad quarter it is it could collapse.

[00:01:08]After 30 years of evaluating company loans in commercial banking here are the benchmarks. D 0.6 excellent. D between 6.0.6 and 1 acceptable and D between 1.2 1 to 2 cautious debt is significant. D above two serious concern.

[00:01:27]High interest costs debt D above four extremely dangerous.

[00:01:32]Important exception bank and NBFCs may not have a high D. Compare within the sector always for manufacturing IT, FMCG and consumer companies. I want D below one always. Here is why this matters specifically in the today's market.

[00:01:47]Nifty has corrected 11% from its all-time high. Crude oil is 1.105 per dollar. Rupee at 96.60 and interest rate still elevated. company with D of about two phase triple threat right now.

[00:02:02]Rising interest cost eating profit weak rupee makes foreign debt more expensive and falling revenue making it harder for the service existing loans.

[00:02:11]Open screener.in search for any company ratio section D ratio. Five C five years trend if it is below one it is declining and that is what the surveyor looks like this correction. Three debt equity ratio screenshot this. Rule number one D below one company funds itself with its own capital. Rule number two D above two check interest rates coverage success carefully. Rule number three D rising every year company increasing debt on debt. Check free screener in ratio section five years D trend after ROE. In short 20 D F A series number two more coming.

[00:02:49]Like this that just because you new first check follow for every single day.

[00:02:55]Thanks for watching.