Net debt to EBITDA

Net debt divided by EBITDA. Roughly, how many years of cash profit it would take to repay the borrowings.

A company with ₹1,020 crore of net debt and ₹1,340 crore of EBITDA is at 0.76 times.

It is the measure lenders write into covenants, which is why it matters beyond analysis: breaching it can trigger a repayment demand regardless of whether the business is sound. Covenant definitions in the loan agreement often differ from the published one, adjusting for leases, for one-off items, or for the EBITDA of acquisitions made mid-year.

Three times is a common comfort ceiling for an industrial, and the figure is much higher for infrastructure with contracted cash flows.

Read the covenant, not just the ratio.