Supreme Infrastructure India Limited — financial distress indicators
Financial-health summary
Supreme Infrastructure India Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 71/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and severe working-capital shortfall. Independently, the Ohlson accounting model puts its 1-year failure probability at 11% and the market-implied (Merton) default probability is 80.2%. In its favour: high insider/promoter ownership (66%) aligns management with survival.
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 -0.01×.
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 -0.85 σ → PD 80%.
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 0.41 (current assets cover 41% 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.
Share count up +279% in a year.
Survival financing: repeated equity raises at depressed prices.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Short-term debt is 514.8× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
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
- High insider/promoter ownership (66%) aligns management with survival.
📰 Recent news scan
- Supreme Infrastructure India (SUPREMEINF) Share Price Fall Streak: Second Straight Session Slips 17.35% - UnivestGoogle News · 2026-10-08
- Supreme Infrastructure India (SUPREMEINF) Share Price near 52-week low as stock falls 6.24% - UnivestGoogle News · 2026-10-07
- Supreme Infrastructure India Share Price Today: 10.44% Drop - UnivestGoogle News · 2026-10-01
- Supreme Infrastructure India Ltd (SUPREMEINF.NS): Stock Holds Ground at ₹84.62 Amid Sideways Drift - Strangle Setup - siam.inGoogle News · 2026-09-02
- Supreme Infrastructure Postpones Board Meeting for FY26 Audited Results by 5 Days to July 9 - SahiGoogle News · 2026-07-04
⚖️ 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 Supreme Infrastructure India Limited's financial-health indicators show?
As of 2026-10-09, Supreme Infrastructure India Limited's public financial data places it in the 'Very weak' band with a distress score of 71/100, driven by operating profit does not cover interest, 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 Supreme Infrastructure India Limited's financial distress score?
71/100 ('Very weak'). Ohlson O-score -2.09 (model 1-year failure probability 11%). Merton distance-to-default -0.85 σ (model default probability 80.2%).
What works in Supreme Infrastructure India Limited's favour?
High insider/promoter ownership (66%) 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.
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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.