Shanti Overseas (India) Limited — financial distress indicators
Financial-health summary
Shanti Overseas (India) Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 94/100). The main indicators are operating profit does not cover interest, cash runway under 12 months and market-implied default probability >20%. Independently, the market-implied (Merton) default probability is 36.4%.
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 -60.58×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
At the current free-cash-flow burn, cash covers ~0 months.
Going-concern standard: management must assess ability to continue for 12 months (Ind AS 1 ¶25–26). Runway below that horizon forces dilution, asset sales or default.
Merton distance-to-default 0.35 σ → PD 36%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue changed -42% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Debt is 60% 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 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Operating margin fell from -25% to -52% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- No material mitigating factors found in the available data.
📰 Recent news scan
- Is Shanti Gold International the Best Stock in Its Sector? A Look at the Numbers - UnivestGoogle News · 2026-10-07
- SHANTIGOLD Stock Price and Chart — NSE:SHANTIGOLD - TradingViewGoogle News · 2026-09-27
- Here's Why We Think Shanti Gold International (NSE:SHANTIGOLD) Might Deserve Your Attention Today - Simply Wall StreetGoogle News · 2026-09-24
- Shanti Overseas (India) Limited (SHANTI.NS) Slips to ₹6.0 as Stock Tests Lower Support Zone - Overbought Signal Alerts - siam.inGoogle News · 2026-09-21
- Ast spacemobile COO Shanti Gupta sells $706,680 in company stock - Investing.comGoogle News · 2026-09-17
- Shanti Inorganics shares make strong debut, list at 90% premium on NSE Emerge - Moneycontrol.comGoogle News · 2026-09-07
⚖️ 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 Shanti Overseas (India) Limited's financial-health indicators show?
As of 2026-10-09, Shanti Overseas (India) Limited's public financial data places it in the 'Very weak' band with a distress score of 94/100, driven by operating profit does not cover interest, cash runway under 12 months and market-implied default probability >20%. 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 Shanti Overseas (India) Limited's financial distress score?
94/100 ('Very weak'). Merton distance-to-default 0.35 σ (model default probability 36.4%).
What works in Shanti Overseas (India) Limited's favour?
No material mitigating factors were found in the available data.
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
- Vishwaraj Sugar Industries Limited (VISHWARAJ)Very weak 90/100
- McLeod Russel India Limited (MCLEODRUSS)Very weak 88/100
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.