Altman Z-Score Flags LICI, PSU Bank Distress

Stock screens can be seductive. Low P/E ratios suggest value. But one bankruptcy-risk screen now flags Life Insurance Corporation of India and seven public-sector banks in the historical distress zone. The Altman Z-score for these names has slipped below 1.8, according to the latest public filings pulled by FairStock's screening engine. That threshold matters. In academic research, a Z-score below 1.8 is tied to elevated default risk. It is not a verdict. It's a quantitative flag that says balance-sheet pressure is high enough to check before buying the low multiple. The screen covers [Life Insurance Corporation of India](/stock/LICI) (NSE: LICI), [Central Bank of India](/stock/CENTRALBK) (NSE: CENTRALBK), [Canara Bank](/stock/CANBK) (NSE: CANBK), [Bank of Baroda](/stock/BANKBARODA) (NSE: BANKBARODA), [Punjab National Bank](/stock/PNB) (NSE: PNB), [Bank of India](/stock/BANKINDIA) (NSE: BANKINDIA), [UCO Bank](/stock/UCOBANK) (NSE: UCOBANK) and [Union Bank of India](/stock/UNIONBANK) (NSE: UNIONBANK). Screening data shows scores ranging from 1.28 to 1.62 across these names. LICI sits at the upper end of that range. Central Bank of India sits at the lower end. What the Altman Z-Score Actually Flags The model combines balance-sheet and income-statement inputs. For banks and insurers, huge deposit and policyholder liabilities push total liabilities far above net worth. That's normal for a lender, but the score treats it as stress. LICI's policyholder liabilities are the main driver of its low score. The seven banks fund loan books through deposits and borrowings. Debt-to-equity ratios are high across the screen. That's not the same as a manufacturer's debt. It's a structural funding load that can amplify losses when asset quality slips. LICI and PSU Bank P/E Ratios Hide the Liability Side LICI's trailing P/E sits near 11. Several lenders trade between 5 and 8 times earnings. Price-to-book for the PSU banks remains under 1.0. The market is not pricing in growth. It...