Shah Metacorp Limited — financial distress indicators
Financial-health summary
Shah Metacorp Limited's reported numbers place it in the 'Watch' financial-health band (distress score 46/100). 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 54% and the market-implied (Merton) default probability is 3.2%. In its favour: strong current ratio (20.59).
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 -0.98×.
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 10.9× EBITDA.
Debt above ~6× EBITDA is deep sub-investment-grade territory; refinancing becomes difficult when rates or earnings move against the company.
O-score 0.17 → model probability 54%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +49% in a year.
Large issuance usually funds operating losses rather than growth.
Operating cash flow negative in 3 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
- Strong current ratio (20.59).
- Revenue still growing (+18% YoY).
- High insider/promoter ownership (54%) aligns management with survival.
📰 Recent news scan
- SHAH INVESTORS HOME LTD Share Price - UpstoxGoogle News · 2026-10-09
- Railway PSU face-off: RITES vs RVNL - Which stock to buy ahead of Q2 results? Expectations, target price, returns - TradingViewGoogle News · 2026-10-08
- SHAH INVESTOR'S HOME LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes - EquitymasterGoogle News · 2026-10-08
- Shah Investors Home Ltd Share Price Today – Live NSE/BSE - INDmoneyGoogle News · 2026-10-06
- A 22,000-share award goes to StableCoinX (USDE) director Alkesh Shah at $0 per share. - Stock TitanGoogle News · 2026-10-02
- Mitie Group (LON:MTO) Stock: Insider Salma Shah Buys 1,744 Shares - MarketBeatGoogle News · 2026-10-01
⚖️ 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 Shah Metacorp Limited's financial-health indicators show?
As of 2026-10-09, Shah Metacorp Limited's public financial data places it in the 'Watch' band with a distress score of 46/100, 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 Shah Metacorp Limited's financial distress score?
46/100 ('Watch'). Ohlson O-score 0.17 (model 1-year failure probability 54%). Merton distance-to-default 1.85 σ (model default probability 3.2%).
What works in Shah Metacorp Limited's favour?
Strong current ratio (20.59). Revenue still growing (+18% YoY). High insider/promoter ownership (54%) 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 Metals, Mining & Chemicals companies with distress indicators
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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.