Sify Technologies Limited — financial distress indicators
Financial-health summary
Sify Technologies Limited's reported numbers place it in the 'Weak' financial-health band (distress score 62/100). The main indicators are operating profit does not cover interest, market-implied default probability >20% and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 51% and the market-implied (Merton) default probability is 52.3%. 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 0.87×.
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 -0.06 σ → PD 52%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
O-score 0.06 → model probability 51%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.74.
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 4.9× 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
- Operating cash flow is positive over the latest 12 months.
- Revenue still growing (+13% YoY).
📰 Recent news scan
- Sify Technologies (SIFY) Looks Pricey As Its 2x P S Tops PeersYahoo Finance · 2026-09-19
- Asian Equities Traded in the US as American Depositary Receipts Edge Up in Wednesday TradingYahoo Finance · 2026-09-16
- Can Sify Technologies (SIFY) Justify Its Valuation On A Recent Pullback?Yahoo Finance · 2026-08-01
- Sify Technologies Ltd (SIFY) Q1 2027 Earnings Call Highlights: Strong Revenue Growth Amidst ...Yahoo Finance · 2026-07-15
- Sify reports Consolidated Financial Results for Q1 FY 2026-27Yahoo Finance · 2026-07-15
- Sify Technologies to announce Financial Results for First Quarter FY 2026-27 on Wednesday July 15, 2026Yahoo Finance · 2026-07-08
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do Sify Technologies Limited's financial-health indicators show?
As of 2026-10-08, Sify Technologies Limited's public financial data places it in the 'Weak' band with a distress score of 62/100, driven by operating profit does not cover interest, market-implied default probability >20% and ohlson o-score signals likely failure. 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 Sify Technologies Limited's financial distress score?
62/100 ('Weak'). Ohlson O-score 0.06 (model 1-year failure probability 51%). Merton distance-to-default -0.06 σ (model default probability 52.3%).
What works in Sify Technologies Limited's favour?
Operating cash flow is positive over the latest 12 months. Revenue still growing (+13% YoY).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Telecom & Media companies with distress indicators
- FreeCast, Inc. (CAST)Very weak 100/100
- Direct Digital Holdings, Inc. (DRCT)Very weak 100/100
- K Wave Media Ltd. (KWM)Very weak 100/100
- Reading International, Inc. (RDIB)Very weak 100/100
- SurgePays, Inc. (SURG)Very weak 100/100
- Upexi, Inc. (UPXI)Very weak 100/100
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.