Jyoti Structures Limited — financial distress indicators
Financial-health summary
Jyoti Structures Limited's reported numbers place it in the 'Watch' financial-health band (distress score 40/100). The main indicators are market-implied default probability >20%, very high leverage and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 73% and the market-implied (Merton) default probability is 32.1%. In its favour: strong current ratio (6.00).
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.
Merton distance-to-default 0.46 σ → PD 32%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Total debt is 29.8× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 0.99 → model probability 73%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Operating cash flow negative in 3 of the last 3 years. The company is profitable, so this likely reflects working-capital or loan-book growth.
A business that cannot fund itself from operations depends on external capital to survive.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Strong current ratio (6.00).
- Revenue still growing (+50% YoY).
📰 Recent news scan
- JYOTISTRUC Q2 2026 Earnings: Revenue Climbs 50.34% YoY as EPS Comes in at ₹0.4697 - Balance Sheet Strength - https://www.siam.in/Google News · 2026-10-04
- Jyoti Structures (JYOTISTRUC.NS) Slips to ₹8.85 as Stock Hovers Near Key Support - Unusual Put Volume - https://www.siam.in/Google News · 2026-10-01
- Jyoti Structures Ltd. Shareholding Pattern – Promoters, FIIs & DIIs - Value ResearchGoogle News · 2026-08-30
- Jyoti Structures Ltd. Share Price: 8.06% Increase Today - UnivestGoogle News · 2026-08-03
- Jyoti Structures' (NSE:JYOTISTRUC) Solid Profits Have Weak Fundamentals - Simply Wall StreetGoogle News · 2026-07-30
⚖️ 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 Jyoti Structures Limited's financial-health indicators show?
As of 2026-10-09, Jyoti Structures Limited's public financial data places it in the 'Watch' band with a distress score of 40/100, driven by market-implied default probability >20%, very high leverage and ohlson o-score signals likely failure. 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 Jyoti Structures Limited's financial distress score?
40/100 ('Watch'). Ohlson O-score 0.99 (model 1-year failure probability 73%). Merton distance-to-default 0.46 σ (model default probability 32.1%).
What works in Jyoti Structures Limited's favour?
Strong current ratio (6.00). Revenue still growing (+50% 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.
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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.