Prudential Sugar Corporation Ltd. — financial distress indicators
Financial-health summary
Prudential Sugar Corporation Ltd.'s reported numbers place it in the 'Watch' financial-health band (distress score 41/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and deep share-price drawdown. Independently, the Ohlson accounting model puts its 1-year failure probability at 27% and the market-implied (Merton) default probability is 21.0%. 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 -0.42×.
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 0.81 σ → PD 21%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Price is -62% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
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
- Operating cash flow is positive over the latest 12 months.
- Strong current ratio (5.21).
- High insider/promoter ownership (56%) aligns management with survival.
📰 Recent news scan
- Prudential Sugar Corporation (PRUDMOULI.NS) Rises 2.82% to ₹13.87, Nears Resistance Zone - Sector Sentiment - https://www.siam.in/Google News · 2026-10-06
- Prudential Sugar PRUDMOULI Trading Window Closure Oct 2026 - Kalkine IndiaGoogle News · 2026-09-24
- Prudential Sugar PRUDMOULI Board Meeting Outcome Sep 2026 - Kalkine IndiaGoogle News · 2026-09-04
- Prudential (PRUDMOULI.NS) Quarterly Results: The Company Lists Its Latest Available Figures in the Latest Session; Price Move: The Market Price Advances 4.92% - Earnings Season Preview - siam.inGoogle News · 2026-08-23
⚖️ 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 Prudential Sugar Corporation Ltd.'s financial-health indicators show?
As of 2026-10-09, Prudential Sugar Corporation Ltd.'s public financial data places it in the 'Watch' band with a distress score of 41/100, driven by operating profit does not cover interest, market-implied default probability >20% and deep share-price drawdown. 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 Prudential Sugar Corporation Ltd.'s financial distress score?
41/100 ('Watch'). Ohlson O-score -1.0 (model 1-year failure probability 27%). Merton distance-to-default 0.81 σ (model default probability 21.0%).
What works in Prudential Sugar Corporation Ltd.'s favour?
Operating cash flow is positive over the latest 12 months. Strong current ratio (5.21). High insider/promoter ownership (56%) 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.