BGR Energy Systems Limited — financial distress indicators
Financial-health summary
BGR Energy Systems Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 97/100). The main indicators are liabilities exceed assets (negative equity), operating profit does not cover interest and losses in each of the last 3 years. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 6.2%. In its favour: high insider/promoter ownership (52%) aligns management with survival.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Total liabilities are 1.67× total assets.
Balance-sheet insolvency test: debts exceeding the fair value of assets is the statutory definition of net-worth erosion; under the Companies Act 2013 it is a recognised sign of financial sickness.
Interest coverage (EBIT / interest) is -0.70×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue changed -34% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Debt is 105% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Operating cash flow negative in 2 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 6.02 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Merton distance-to-default 1.54 σ → PD 6.2%.
Investment-grade issuers typically have 1-year PD well below 1%.
Operating margin fell from -25% to -198% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (52%) aligns management with survival.
📰 Recent news scan
- BGR Energy Systems Upper Circuit Today: Price, Data and Peers - UnivestGoogle News · 2026-10-07
- BGR Energy Systems Ltd. Key Financial Ratios – Valuation, Profitability & More - Value ResearchGoogle News · 2026-09-29
- BGR Energy Systems Ltd. Lower Circuit Today: Price, Data and Peers - UnivestGoogle News · 2026-09-29
- BGR Energy promoter Sasikala Raghupathy transfers 2,100 shares to Arjun Raghupathy - scanx.tradeGoogle News · 2026-09-21
- BGR Energy Slips 3.19% to ₹248.87; ₹236.43 Support Holds the Key for Stability - Covered Call Trade - https://www.siam.in/Google News · 2026-09-09
⚖️ Indian legal pathway — the IBC, 2016
How insolvency starts
- A financial creditor (§7), an operational creditor after a demand notice (§§8–9) or the company itself (§10) can apply to the NCLT once a default of at least ₹1 crore occurs (§4).
- On admission a moratorium (§14) stops suits and recovery; the board is suspended and an insolvency professional runs the company.
- The Committee of Creditors approves a resolution plan with 66% of voting share (§30(4)) within an outer limit of 330 days (§12); otherwise liquidation (§33) under the §53 waterfall — equity ranks last. Defaulting promoters are generally barred from bidding (§29A).
Earlier warning stages
- RBI's Prudential Framework for Resolution of Stressed Assets (7 June 2019): lenders must review a borrower within 30 days of default and implement a resolution plan, or provide more.
- Listed companies must disclose loan defaults to exchanges under SEBI (LODR); a rating downgrade to “D” is a public signal.
- Auditors must report going-concern uncertainty (SA 570 / Ind AS 1).
Frequently asked questions
What do BGR Energy Systems Limited's financial-health indicators show?
As of 2026-10-09, BGR Energy Systems Limited's public financial data places it in the 'Very weak' band with a distress score of 97/100, driven by liabilities exceed assets (negative equity), operating profit does not cover interest and losses in each of the last 3 years. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is BGR Energy Systems Limited's financial distress score?
97/100 ('Very weak'). Ohlson O-score 6.02 (model 1-year failure probability 100%). Merton distance-to-default 1.54 σ (model default probability 6.2%).
What works in BGR Energy Systems Limited's favour?
High insider/promoter ownership (52%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
Under the IBC the Committee of Creditors controls the resolution; the §53 waterfall pays secured creditors and workers first and equity last. In most resolution plans existing shareholders are wiped out or left with a token stake, and the company may be delisted.
Other Industrials & Capital Goods companies with distress indicators
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- Premier Limited (PREMIER)Very weak 99/100
- Global Vectra Helicorp Limited (GLOBALVECT)Very weak 96/100
All Industrials & Capital Goods companies with distress indicators →
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.