Veranda Learning Solutions Limited — financial distress indicators
Financial-health summary
Veranda Learning Solutions Limited's reported numbers place it in the 'Weak' financial-health band (distress score 67/100). The main indicators are market-implied default probability >20%, severe working-capital shortfall and thin interest coverage. Independently, the Ohlson accounting model puts its 1-year failure probability at 35% and the market-implied (Merton) default probability is 75.7%. 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.
Merton distance-to-default -0.70 σ → PD 76%.
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 0.69 (current assets cover 69% 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.
Interest coverage is only 1.49× (lenders typically require ≥ 2–3×).
Low coverage leaves little buffer against a profit dip before a debt-service or covenant breach.
Price is -88% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Short-term debt is 2.8× cash on hand.
Maturity wall: debt due within a year must be refinanced, which is the most common proximate cause of filings.
Share count up +29% in a year.
Large issuance usually funds operating losses rather than growth.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+35% YoY).
- High insider/promoter ownership (53%) aligns management with survival.
📰 Recent news scan
- Veranda Learning Solutions Upper Circuit Today: Price, Data and Peers - UnivestGoogle News · 2026-10-08
- Veranda Learning Constitutes Board for JSCEL Ahead of October 6 Demerger Record Date - WhalesbookGoogle News · 2026-10-05
- Veranda Learning promoters pledge shares for ₹111 crore credit - BusinessLineGoogle News · 2026-09-22
- Veranda Learning promoters pledge 12 lakh shares for ₹111 crore credit - scanx.tradeGoogle News · 2026-09-22
- Veranda Learning Solutions (VERANDA.NS) Trades Near ₹218 as Consolidation Persists Below ₹229 Resistance - Wide Range Bar - siam.inGoogle News · 2026-09-16
- Veranda Learning Solutions - Mutual funds made a complete exit from 25 stocks in June. Check top 5 - The Economic TimesGoogle News · 2026-07-19
⚖️ 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 Veranda Learning Solutions Limited's financial-health indicators show?
As of 2026-10-09, Veranda Learning Solutions Limited's public financial data places it in the 'Weak' band with a distress score of 67/100, driven by market-implied default probability >20%, severe working-capital shortfall and thin interest coverage. 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 Veranda Learning Solutions Limited's financial distress score?
67/100 ('Weak'). Ohlson O-score -0.61 (model 1-year failure probability 35%). Merton distance-to-default -0.7 σ (model default probability 75.7%).
What works in Veranda Learning Solutions Limited's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+35% YoY). High insider/promoter ownership (53%) 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 Consumer Staples companies with distress indicators
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- Shanti Overseas (India) Limited (SHANTI)Very weak 94/100
- Vishwaraj Sugar Industries Limited (VISHWARAJ)Very weak 90/100
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.