Interest paid versus interest expense

The finance cost in the income statement and the interest actually paid in the cash flow statement should be close. When they are not, the difference has a reason worth finding.

A company charging ₹140 crore of finance cost while paying ₹210 crore has paid ₹70 crore more than it expensed, and the usual explanation is interest capitalised into an asset under construction rather than run through profit.

That treatment is permitted and is not a red flag on its own. It becomes one when the capitalised amount is large relative to profit, because the reported earnings then depend on a project that is not yet earning anything, and the charge arrives later as higher depreciation.

Compute the ratio each year. A widening gap at a company with a growing capital work in progress balance is one number telling the same story as another.