Swan Defence and Heavy Industries Limited — financial distress indicators
Financial-health summary
Swan Defence and Heavy Industries Limited's reported numbers place it in the 'Weak' financial-health band (distress score 57/100). 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 94% and the market-implied (Merton) default probability is 0.0%. 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 -30.28×.
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 88% 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 2 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
O-score 2.82 → model probability 94%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Strong current ratio (4.49).
- Revenue still growing (+3911% YoY).
- High insider/promoter ownership (91%) aligns management with survival.
📰 Recent news scan
- SWANDEF Share Price Today - SWAN DEFENCE N HEVY IND L Stock Price Live NSE/BSE - UnivestGoogle News · 2026-10-03
- Swan Defence and Heavy Industries Limited (SWANDEF.BO) Stock Price, News, Quote & History - Yahoo! Finance CanadaGoogle News · 2026-10-01
- Swan Defence SWANDEF Trading Window Closed Oct 2026 - Kalkine IndiaGoogle News · 2026-09-28
- Swan (SWANDEF.NS) Stock Analysis: Bullish Momentum at +1.38% Gain 2026-09-16 - Weak Sell Signals - https://www.siam.in/Google News · 2026-09-16
⚖️ 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 Swan Defence and Heavy Industries Limited's financial-health indicators show?
As of 2026-10-09, Swan Defence and Heavy Industries Limited's public financial data places it in the 'Weak' band with a distress score of 57/100, 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 Swan Defence and Heavy Industries Limited's financial distress score?
57/100 ('Weak'). Ohlson O-score 2.82 (model 1-year failure probability 94%). Merton distance-to-default 9.22 σ (model default probability 0.0%).
What works in Swan Defence and Heavy Industries Limited's favour?
Operating cash flow is positive over the latest 12 months. Strong current ratio (4.49). Revenue still growing (+3911% YoY). High insider/promoter ownership (91%) 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.