Shemaroo Entertainment Limited — financial distress indicators
Financial-health summary
Shemaroo Entertainment Limited's reported numbers place it in the 'Weak' financial-health band (distress score 60/100). The main indicators are operating profit does not cover interest, losses in each of the last 3 years and material debt with no ebitda. Independently, the Ohlson accounting model puts its 1-year failure probability at 91% and the market-implied (Merton) default probability is 1.7%. 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 -7.18×.
When EBIT < interest, debt service is funded from cash reserves or new borrowing — the classic precursor to payment default and covenant breach.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Debt is 44% of assets while EBITDA is not positive.
With no operating earnings, repayment depends entirely on asset sales or fresh capital.
O-score 2.30 → model probability 91%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Revenue changed -15% year over year.
Falling sales reduce cash available for debt service.
Operating margin fell from -0% to -46% 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
- Operating cash flow is positive over the latest 12 months.
- High insider/promoter ownership (72%) aligns management with survival.
📰 Recent news scan
- Shemaroo Entertainment (SHEMAROO) Share Price Falls 9.49% as Micro Cap Slips to Rs 102 - UnivestGoogle News · 2026-10-08
- Shemaroo Entertainment Share: Bull Case vs Bear Case for 2026 - UnivestGoogle News · 2026-09-24
- Picturepost Studios Ltd Peer Comparison – Compare with Others - Value ResearchGoogle News · 2026-09-03
- Shemaroo (SHEMAROO.NS) Latest: Falls 1.10% to ₹126.51 for the Current Session; Next Session: the Session Ends Within the Reported Technical Boundaries on the Day - Naked POC - siam.inGoogle News · 2026-08-24
- Shemaroo Entertainment shareholders approve all AGM resolutions - scanx.tradeGoogle News · 2026-08-17
- Shemaroo Entertainment loss narrows 82%, targets 20% EBITDA margin - scanx.tradeGoogle News · 2026-07-23
⚖️ 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 Shemaroo Entertainment Limited's financial-health indicators show?
As of 2026-10-09, Shemaroo Entertainment Limited's public financial data places it in the 'Weak' band with a distress score of 60/100, driven by operating profit does not cover interest, losses in each of the last 3 years 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 Shemaroo Entertainment Limited's financial distress score?
60/100 ('Weak'). Ohlson O-score 2.3 (model 1-year failure probability 91%). Merton distance-to-default 2.12 σ (model default probability 1.7%).
What works in Shemaroo Entertainment Limited's favour?
Operating cash flow is positive over the latest 12 months. High insider/promoter ownership (72%) 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 Telecom & Media companies with distress indicators
- Diligent Media Corporation Limited (DNAMEDIA)Very weak 100/100
- Mahanagar Telephone Nigam Limited (MTNL)Very weak 100/100
- Radaan Mediaworks India Limited (RADAAN)Very weak 100/100
- Reliance Communications Limited (RCOM)Very weak 100/100
- SITI Networks Limited (SITINET)Very weak 100/100
- Tips Films Limited (TIPSFILMS)Very weak 97/100
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.