With business dull, larger companies, especially in the public sector, are delaying payments to their suppliers; this coupled with the fact that banks are turning risk-averse is threatening the very existence of smaller enterprises. Most companies, especially in the infrastructure space, are highly leveraged—long-term borrowings at Lanco were around R26,000 crore, while the ebitda for FY13 was just R2,580 crore. Moreover, the ability of companies to pay back loans is weakening; for the sample of 1,909 companies, interest cover has dropped to 4.6 times in Q4FY13 from 5.6 times in Q2FY13. Given the lack of clarity in policy and the relatively high cost of money, it’s hard to see investments picking up soon; more important than financial resources, though, is the inadequate supply of raw materials like coal and gas, which is hurting production of power and iron ore that has left steel plants idle. Even the consumption piece, which was holding up till recently, is slowing down—domestic revenues at Hindustan Unilever grew at 13% yoy in Q4FY13 compared with 16.5% yoy in the nine months to December 2012. Discretionary spends are clearly tapering off—at Bajaj Auto, for instance, sales of motorcycles in the home market fell 10% yoy while volumes at Asian Paints grew by an estimated 3-4%. Even drug firms are feeling the pinch; sales at Cipla, for instance, were up just 5% yoy. The bottom line is that India Inc’s profits are wilting, having fallen a sharp 16% yoy in Q4FY13. Hopefully, the monsoon will bring some green shoots.