Sanwaria Consumer Limited — financial distress indicators
Financial-health summary
Sanwaria Consumer Limited's reported numbers place it in the 'Weak' financial-health band (distress score 61/100). The main indicators are liabilities exceed assets (negative equity), market-implied default probability >20% 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 99.9%. In its favour: cash on hand covers all debt (net-cash balance sheet).
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 2.82× 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.
Merton distance-to-default -3.09 σ → PD 100%.
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 0.27 (current assets cover 27% 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 16.68 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Net income negative in 3 of 3 fiscal years. Partly offset by positive operating cash flow and net cash.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
- Operating cash flow is positive over the latest 12 months.
📰 Recent news scan
- SANWARIA.NS Q2 2026 Earnings: Per-Share Loss of ₹0.06 With Revenue Reported at Nil - Earnings Season Outlook - https://www.siam.in/Google News · 2026-10-06
- SANWARIA.NS Q2 2026 Earnings: Per-Share Loss of ₹0.06 With Nil Reported Revenue - Balance Sheet Strength - https://www.siam.in/Google News · 2026-10-05
- Sanwaria Consumer AGM adopts FY26 loss of ₹281.53 lakh - scanx.tradeGoogle News · 2026-09-23
- Sanwaria Consumer Share: Bull Case vs Bear Case for 2026 - UnivestGoogle News · 2026-09-18
- Sanwaria Consumer Ltd. Shareholding Pattern – Promoters, FIIs & DIIs - Value ResearchGoogle News · 2026-09-03
- Price Band Hitters Today: Sanwaria Consumer Leads Movers - HDFC SkyGoogle News · 2026-06-19
⚖️ 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 Sanwaria Consumer Limited's financial-health indicators show?
As of 2026-10-09, Sanwaria Consumer Limited's public financial data places it in the 'Weak' band with a distress score of 61/100, driven by liabilities exceed assets (negative equity), 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 Sanwaria Consumer Limited's financial distress score?
61/100 ('Weak'). Ohlson O-score 16.68 (model 1-year failure probability 100%). Merton distance-to-default -3.09 σ (model default probability 99.9%).
What works in Sanwaria Consumer Limited's favour?
Cash on hand covers all debt (net-cash balance sheet). Operating cash flow is positive over the latest 12 months.
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.