Tips Films Limited — financial distress indicators
Financial-health summary
Tips Films Limited's reported numbers place it in the 'Very weak' financial-health band (distress score 97/100). The main indicators are operating profit does not cover interest, cash runway under 12 months and market-implied default probability >20%. Independently, the Ohlson accounting model puts its 1-year failure probability at 98% and the market-implied (Merton) default probability is 25.0%. In its favour: revenue still growing (+114% yoy).
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 -21.89×.
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 ~4 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 0.67 σ → PD 25%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Debt is 78% 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 3.77 → model probability 98%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.96.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Short-term debt is 48.0× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Revenue still growing (+114% YoY).
- High insider/promoter ownership (79%) aligns management with survival.
📰 Recent news scan
- Tips Films Limited (TIPSFILMS.NS) Slips Over 2% on NSE, Drifts Toward Key Support Zone - EMA Signal - https://www.siam.in/Google News · 2026-10-08
- Tips Films Stock Bounce and Technical Outlook - Kalkine IndiaGoogle News · 2026-10-06
- Tips Films Share Price rises today; sector and peer view - UnivestGoogle News · 2026-10-06
- Tips Films Ltd (NSE: TIPSFILMS) Declines 5.80% as Stock Draws Market Attention - Kalkine IndiaGoogle News · 2026-09-30
- Tips Films passes all resolutions at 17th AGM with promoter backing - scanx.tradeGoogle News · 2026-09-17
⚖️ 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 Tips Films Limited's financial-health indicators show?
As of 2026-10-09, Tips Films Limited's public financial data places it in the 'Very weak' band with a distress score of 97/100, 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 Tips Films Limited's financial distress score?
97/100 ('Very weak'). Ohlson O-score 3.77 (model 1-year failure probability 98%). Merton distance-to-default 0.67 σ (model default probability 25.0%).
What works in Tips Films Limited's favour?
Revenue still growing (+114% YoY). High insider/promoter ownership (79%) 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
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- 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
- Tata Teleservices (Maharashtra) Limited (TTML)Very weak 95/100
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.