Delta Manufacturing Limited — financial distress indicators
Financial-health summary
Delta Manufacturing Limited's reported numbers place it in the 'Weak' financial-health band (distress score 50/100). The main indicators are severe working-capital shortfall, losses in each of the last 3 years and very high leverage. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 3.5%. In its favour: operating cash flow is positive over the latest 12 months.
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.
Current ratio is 0.50 (current assets cover 50% of near-term obligations).
Cash-flow insolvency test: inability to pay debts as they fall due is the trigger for both U.S. involuntary petitions and Indian IBC default.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Total debt is 12.5× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 5.86 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Short-term debt is 10.1× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+11% YoY).
- High insider/promoter ownership (73%) aligns management with survival.
📰 Recent news scan
- Delta Manufacturing (DELTAMAGNT.NS) Q2 2026 Earnings: Revenue Climbs 10.8% YoY, but Bottom Line Slips to a Loss of ₹11.44 per Share - Earnings Per Share - https://www.siam.in/Google News · 2026-09-13
- Delta Manufacturing Q2 2026 Earnings: Loss of ₹11.44 Per Share Despite 10.8% Revenue Growth - Earnings Momentum Score - https://www.siam.in/Google News · 2026-09-10
- Delta Manufacturing (DELTAMAGNT.NS) Edges Higher to ₹57.55: Stock Trapped Between Key Support and Resistance - SuperTrend - siam.inGoogle News · 2026-08-30
- Delta Manufacturing Ltd. (DELTAMAGNT) Share Price Rises 15% Amid Market Activity - UnivestGoogle News · 2026-07-28
- Delta Manufacturing Ltd. (DELTAMAGNT) Share Price Surges 16.14% Today - UnivestGoogle News · 2026-07-28
⚖️ 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 Delta Manufacturing Limited's financial-health indicators show?
As of 2026-10-09, Delta Manufacturing Limited's public financial data places it in the 'Weak' band with a distress score of 50/100, driven by severe working-capital shortfall, losses in each of the last 3 years and very high leverage. 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 Delta Manufacturing Limited's financial distress score?
50/100 ('Weak'). Ohlson O-score 5.86 (model 1-year failure probability 100%). Merton distance-to-default 1.81 σ (model default probability 3.5%).
What works in Delta Manufacturing Limited's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+11% YoY). High insider/promoter ownership (73%) 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.
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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.