Max Estates Limited — financial distress indicators
Financial-health summary
Max Estates Limited's reported numbers place it in the 'Watch' financial-health band (distress score 35/100). The main indicators are operating profit does not cover interest, very high leverage and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 72% and the market-implied (Merton) default probability is 0.0%. In its favour: strong current ratio (1.78).
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 -0.13×.
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 20.1× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 0.96 → model probability 72%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Strong current ratio (1.78).
- Revenue still growing (+24% YoY).
- High insider/promoter ownership (70%) aligns management with survival.
📰 Recent news scan
- Max Estates Q2 Sales Bookings Rise Sharply in NCR - Kalkine IndiaGoogle News · 2026-10-07
- News by CNBC TV18 on TradingView, 2026-10-06 — cnbctv:e95f213de094b:0 - TradingViewGoogle News · 2026-10-06
- Max Estates Limited (MAXESTATES.NS) Falls 5.21% to ₹556.5, Sliding Toward Key Support - Percent Above MA - https://www.siam.in/Google News · 2026-10-01
- Max Estates Share Price Today Falls; Valuation in Focus - UnivestGoogle News · 2026-10-01
- Stocks to watch: NSE, Exide Industries, Welspun Living, Max Estates, GHCL - Business StandardGoogle News · 2026-09-24
- We Think You Can Look Beyond Max Estates' (NSE:MAXESTATES) Lackluster Earnings - Simply Wall StreetGoogle News · 2026-05-31
⚖️ 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 Max Estates Limited's financial-health indicators show?
As of 2026-10-09, Max Estates Limited's public financial data places it in the 'Watch' band with a distress score of 35/100, driven by operating profit does not cover interest, 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 Max Estates Limited's financial distress score?
35/100 ('Watch'). Ohlson O-score 0.96 (model 1-year failure probability 72%). Merton distance-to-default 5.88 σ (model default probability 0.0%).
What works in Max Estates Limited's favour?
Strong current ratio (1.78). Revenue still growing (+24% YoY). High insider/promoter ownership (70%) 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.