Islamic Finance: How Relevant is Debt in Indian Companies

Any concept based on ethics should also have economic viability and should be logical. Islamic financial system is one such concept which requires a lot of effort to bring economic viability and technical expertise into its ambit. This study aims to provide one such technical perspective of the system. This is an empirical attempt to study financial risk in companies from the perspective of Islamic finance. The basic philosophy of the study is that, Debt is not advisable and should be avoided by companies. It tries to analyze the relationship between Debt, Equity and Profitability of ‘Sensex’ companies in India. It hopes to make a significant contribution to the available literature on the subject, especially in economic scenario such as India.