MBL Infrastructure Limited — financial distress indicators
Financial-health summary
MBL Infrastructure Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 82/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and severe working-capital shortfall. Independently, the Ohlson accounting model puts its 1-year failure probability at 91% and the market-implied (Merton) default probability is 52.4%. 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 (EBIT / interest) is 0.01×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Merton distance-to-default -0.06 σ → PD 52%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Current ratio is 0.26 (current assets cover 26% 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.
Total debt is 7.1× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 2.27 → model probability 91%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Short-term debt is 5.9× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Share count up +24% in a year.
Large issuance usually funds operating losses rather than growth.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+37% YoY).
- High insider/promoter ownership (76%) aligns management with survival.
📰 Recent news scan
- MBL Infrastructure Ltd. Upper Circuit Streak: Day 2 Price and Data - UnivestGoogle News · 2026-09-30
- MBL Infrastructure Ltd. Lower Circuit Today: Price, Data and Peers - UnivestGoogle News · 2026-09-24
- MBL Infrastructure (NSEI:MBLINFRA) - Stock Analysis - Simply Wall StreetGoogle News · 2026-08-20
- MBL Infrastructure Limited Insider Trading & Ownership Structure - Simply Wall StreetGoogle News · 2026-08-20
⚖️ 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 MBL Infrastructure Limited's financial-health indicators show?
As of 2026-10-09, MBL Infrastructure Limited's public financial data places it in the 'Very weak' band with a distress score of 82/100, driven by operating profit does not cover interest, market-implied default probability >20% 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 MBL Infrastructure Limited's financial distress score?
82/100 ('Very weak'). Ohlson O-score 2.27 (model 1-year failure probability 91%). Merton distance-to-default -0.06 σ (model default probability 52.4%).
What works in MBL Infrastructure Limited's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+37% YoY). High insider/promoter ownership (76%) 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.