Chinese solar power equipment-maker Chaori Solar’s debt default earlier this month has evoked fresh worries not just in China, but also in other Asian countries. A recent report by BNP Paribas highlights countries and sectors in Asia (barring Japan) that face debt pressure through an analysis of 5,800 non-financial companies.

Indian industrials, telecom and utilities topped the list of sectors under stress, though they had Korean industrials as well as the Chinese materials sector as company.

South Korean industries have seen their interest cover drop from 2.2 times in 2009 to just 0.6 times in 2013, implying difficulty in meeting interest payments from cash flows. For Indian telecom players, the ratio has dropped from 4.6 times to 1 time.

The Indian industrials segment has seen the ratio fell by half to 1.5 times.

Even after excluding frontline companies in each sector to eliminate the risk of skewed results, the health of the Indian telecom, industrials and utilities sectors continues to set alarm bells ringing. By including other parameters like the debt-to-equity, working capital-to-total assets and market capitalisation-to-liabilities ratios, the research house has drawn up a list of the 25 most stressed companies.

Eleven of these are from China, five from India, six from Korea and one each from Taiwan, Thailand and Indonesia.

The total market capitalisation of these 25 companies is $18.5 billion and the total debt on their balance sheets adds up to $57 billion.

With many of the debt-ridden companies hailing from cyclical sectors such as industrials and materials, where earnings are exposed to risks of a Chinese slowdown, trouble looks imminent.

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