High interest costs could take a toll on the overall profitability of infrastructure companies. High interest rates and some other problems connected with land acquisition and inflation levels add to the troubles.
According to industry people, the interest burden has goÂne up by nearly 50 per cent over corresponding period last year from 8-8.5 per cent to 12.50 per cent. This alone is a major cause for considerable pressure on margins. The country's asset development process has been affected in some ways due to delays in securing clearances and also due to growing costs for companies, both from finance point of view and also from execution aspect. In case of new bids, infrastructure companies need to be extremely careful.
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