Handson Global Management (HGM) Limited — financial distress indicators
Financial-health summary
Handson Global Management (HGM) Limited's reported numbers place it in the 'Weak' financial-health band (distress score 58/100). The main indicators are operating profit does not cover interest, very high leverage and operations consume cash. Independently, the Ohlson accounting model puts its 1-year failure probability at 97% and the market-implied (Merton) default probability is 2.3%. In its favour: revenue still growing (+165% yoy).
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.
Interest coverage (EBIT / interest) is -3.32×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Total debt is 8.8× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 3.63 → model probability 97%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Cash covers ~14 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
Operating margin fell from 13% to -6% 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
- Revenue still growing (+165% YoY).
📰 Recent news scan
- Euro Panel Products Ltd leads losers in 'B' group - Business StandardGoogle News · 2026-09-22
- HGM acquires 1.45% stake in XBP Global for US$579,997 - scanx.tradeGoogle News · 2026-09-16
- Is HandsOn Global Management HGM a Good Buy After Its Q1 FY27 Results? - UnivestGoogle News · 2026-09-11
- HandsOn Global Management (HGM.NS) Slips Below ₹50 as Stock Tests Key Support Zone - Continuation Pattern Picks - siam.inGoogle News · 2026-09-10
- nLIGHT (NASDAQ:LASR): A High Growth Momentum Stock with a Strong Breakout Setup - ChartMillGoogle News · 2026-07-25
- Cognex Corp (NASDAQ:CGNX) Presents a High Growth Momentum Breakout Setup - ChartMillGoogle News · 2026-07-16
⚖️ 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 Handson Global Management (HGM) Limited's financial-health indicators show?
As of 2026-10-09, Handson Global Management (HGM) Limited's public financial data places it in the 'Weak' band with a distress score of 58/100, driven by operating profit does not cover interest, very high leverage and operations consume cash. 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 Handson Global Management (HGM) Limited's financial distress score?
58/100 ('Weak'). Ohlson O-score 3.63 (model 1-year failure probability 97%). Merton distance-to-default 2.0 σ (model default probability 2.3%).
What works in Handson Global Management (HGM) Limited's favour?
Revenue still growing (+165% YoY).
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 IT & Software companies with distress indicators
- Quintegra Solutions Limited (QUINTEGRA)Very weak 95/100
- SecureKloud Technologies Limited (SECURKLOUD)Very weak 83/100
- GSS Infotech Limited (GSS)Very weak 72/100
- Suvidhaa Infoserve Limited (SUVIDHAA)Very weak 72/100
- RPSG Ventures Limited (RPSGVENT)Weak 58/100
- Xelpmoc Design and Tech Limited (XELPMOC)Weak 57/100
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.