NRB Industrial Bearings Limited — financial distress indicators
Financial-health summary
NRB Industrial Bearings Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 82/100). The main indicators are liabilities exceed assets (negative equity), operating profit does not cover interest and material debt with no ebitda. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 1.7%. In its favour: revenue still growing (+18% 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 1.46× 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 -1.56×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Debt is 46% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
Operating cash flow negative in 2 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 6.87 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.77.
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.
Short-term debt is 1.9× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Revenue still growing (+18% YoY).
- High insider/promoter ownership (76%) aligns management with survival.
📰 Recent news scan
- Stock market falls double digits, turnover tops Rs 4 billion - OnlineKhabar English NewsGoogle News · 2026-10-02
- NRB Industrial Bearings (NIBL.NS) Climbs 7.74% to ₹32.99 as Buyers Reclaim Short-Term Ground - Gamma Squeeze - siam.inGoogle News · 2026-09-22
- NRB Industrial Bearings Ltd. Upper Circuit: Price and Key Data - UnivestGoogle News · 2026-09-11
- NEPSE gains 14 points as turnover falls; SEBON announces capital market policy measures - The Farsight NepalGoogle News · 2026-07-15
⚖️ 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 NRB Industrial Bearings Limited's financial-health indicators show?
As of 2026-10-09, NRB Industrial Bearings Limited's public financial data places it in the 'Very weak' band with a distress score of 82/100, driven by liabilities exceed assets (negative equity), operating profit does not cover interest and material debt with no ebitda. 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 NRB Industrial Bearings Limited's financial distress score?
82/100 ('Very weak'). Ohlson O-score 6.87 (model 1-year failure probability 100%). Merton distance-to-default 2.13 σ (model default probability 1.7%).
What works in NRB Industrial Bearings Limited's favour?
Revenue still growing (+18% 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.