Kohinoor Foods Limited — financial distress indicators
Financial-health summary
Kohinoor Foods Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 71/100). The main indicators are liabilities exceed assets (negative equity), operating profit does not cover interest and severe working-capital shortfall. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 2.5%. In its favour: revenue still growing (+71% 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.
Total liabilities are 2.02× 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 -2.01×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Current ratio is 0.56 (current assets cover 56% 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.
O-score 8.50 → 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 66.1× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Operating margin fell from 9% to -8% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Operating cash flow negative in 2 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
- Revenue still growing (+71% YoY).
- High insider/promoter ownership (57%) aligns management with survival.
📰 Recent news scan
- Hampidjan stock reports EUR 4.14 million Kohinoor payment - AD HOC NEWSGoogle News · 2026-10-08
- Kohinoor Foods shareholders approve all AGM resolutions - scanx.tradeGoogle News · 2026-10-01
- Kohinoor Foods vs Nifty 50: Share Price Performance Compared - UnivestGoogle News · 2026-10-01
- Kohinoor Foods (KOHINOOR.NS) Steadies Near ₹30.76 as Traders Eye ₹32.3 Resistance - Bear Flag - https://www.siam.in/Google News · 2026-09-21
- Kohinoor Foods Ltd. Key Financial Ratios – Valuation, Profitability & More - Value ResearchGoogle News · 2026-08-30
- Kohinoor Energy Limited Actuals & Estimates (PSX:KOHE) - TradingViewGoogle News · 2026-06-26
⚖️ 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 Kohinoor Foods Limited's financial-health indicators show?
As of 2026-10-09, Kohinoor Foods Limited's public financial data places it in the 'Very weak' band with a distress score of 71/100, driven by liabilities exceed assets (negative equity), operating profit does not cover interest and severe working-capital shortfall. 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 Kohinoor Foods Limited's financial distress score?
71/100 ('Very weak'). Ohlson O-score 8.5 (model 1-year failure probability 100%). Merton distance-to-default 1.96 σ (model default probability 2.5%).
What works in Kohinoor Foods Limited's favour?
Revenue still growing (+71% YoY). 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.
Other Consumer Staples companies with distress indicators
- MT Educare Limited (MTEDUCARE)Very weak 100/100
- Shree Rama Newsprint Limited (RAMANEWS)Very weak 100/100
- Shree Renuka Sugars Limited (RENUKA)Very weak 100/100
- Simbhaoli Sugars Limited (SIMBHALS)Very weak 100/100
- Shanti Overseas (India) Limited (SHANTI)Very weak 94/100
- Vishwaraj Sugar Industries Limited (VISHWARAJ)Very weak 90/100
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.