Indian Companies that Might Turn Bankrupt

Bangalore: While Indian economic growth is apparently slow and lethargic with a background score of various scams, added with the unpromising global economic concerns, the Indian corporate sector is facing a fatal period. Though many Indian corporate companies are doing their best to survive, some are at the edge of deterioration.

Ridham Desai of Morgan Stanley, supported by his team of analysts has put forward the a list of Indian firms that face a balance sheet stress, using their quantitative analysis—Altman Z-score and cash flow tests. Altman’s Z-Score measures the risk of bankruptcy of each company; and the cash flow stress test assesses the refinancing risk. Morgan Stanley covered a total of 104 firms of which 17 companies had an Altman’s Z-Score below 1.8 and they are seen to be at financial risk.

Here are the 17 firms; those appear stressed on the cash flow measure.

#1 Hathway

Altman’s Z-Score: 1.78

According to the study, Hathway Cable & Datacom, the major cable television service operator in India gets an Altman’s Z-Score of 1.78, below 1.8, implying an increased probability of financial stress. Headquartered in Mumbai, the company has large operations in many cities, including Hyderabad, Mumbai, Pune and Bangalore. Hathway has diversified its operations into providing internet via cable and was the first to do so in Chennai and it was the first company to provide internet using the CATV network in India.

#2 Adani Ports and SEZ

Altman’s Z-Score: 1.71

When Morgan Stanley combined the results of Z-Score and cash flow tests, Adani Ports and Special Economic Zone (APSEZL) came at the second position with the score 1.71. The firm, promoted by Adani Group, thus, may face a financial crisis. The major port projects of the company operates in India as well as overseas as follows: Adani Mundra Port, Adani Petronet Port, Adani Hazira Port, Adani Murmugoa Coal Terminal, Adani Vizag Coal terminal and Adani Abbot Point Terminal.