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Cut in Repo Rate may Impact CIL Balance Sheet

News

A sharp rate cut may help in the overall economic recovery, but could hurt companies that are sitting on cash. A dip in rates shrinks interest income that adds to their bottom lines.
Source: ET

SNP Insight

Cut in repo rate may hurt the cash rich companies but it is likely to increase the investment in the infrastructure segment. This may coerce CIL to switch from saving (which accounted for approx. 30% profit before tax) to investment to keep up its balance sheet positive year on year.
 

Source: SNP Infra Research