Hindware Home Innovation Limited — financial distress indicators
Financial-health summary
Hindware Home Innovation Limited's reported numbers place it in the 'Weak' financial-health band (distress score 55/100). The main indicators are thin interest coverage, ohlson o-score signals likely failure and current liabilities exceed current assets. Independently, the Ohlson accounting model puts its 1-year failure probability at 79% and the market-implied (Merton) default probability is 11.2%. 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.
Interest coverage is only 1.42× (lenders typically require ≥ 2–3×).
Low coverage leaves little buffer against a profit dip before a debt-service or covenant breach.
O-score 1.32 → model probability 79%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.97.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Merton distance-to-default 1.22 σ → PD 11.2%.
Investment-grade issuers typically have 1-year PD well below 1%.
Short-term debt is 18.5× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Revenue declined every year for three years.
Structural, not cyclical, decline.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- High insider/promoter ownership (57%) aligns management with survival.
📰 Recent news scan
- Hindware Home Innovation Share Price Today near weak levels - UnivestGoogle News · 2026-10-07
- Hindware Home Innovation Q2 2026 Earnings: ₹4.74 Loss Per Share as Revenue Slips 1.54%, Stock Gains 3.63% - Preliminary Results - https://www.siam.in/Google News · 2026-09-28
- HINDWAREAP.NS Q2 2026 Earnings: ₹4.74 Loss Per Share as Revenue Slips 1.54%, Stock Still Gains 2.92% - EPS Miss Report - siam.inGoogle News · 2026-09-17
- Hindware Home Innovation (NSEI:HINDWAREAP) Stock Forecast & Analyst Predictions - Simply Wall StreetGoogle News · 2026-08-16
- Why Is HINDWAREAP Stock Attracting Strong Market Attention Today? (NSE: HINDWAREAP) - Kalkine IndiaGoogle News · 2026-06-12
- Hindware Home Innovation Share Price Target 2026: Rs 260 Analyst Forecast - UnivestGoogle News · 2026-06-12
⚖️ 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 Hindware Home Innovation Limited's financial-health indicators show?
As of 2026-10-09, Hindware Home Innovation Limited's public financial data places it in the 'Weak' band with a distress score of 55/100, driven by thin interest coverage, ohlson o-score signals likely failure and current liabilities exceed current assets. 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 Hindware Home Innovation Limited's financial distress score?
55/100 ('Weak'). Ohlson O-score 1.32 (model 1-year failure probability 79%). Merton distance-to-default 1.22 σ (model default probability 11.2%).
What works in Hindware Home Innovation Limited's favour?
Operating cash flow is positive over the latest 12 months. High insider/promoter ownership (57%) 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.