Altman Z-Screen Flags LICI, 7 PSU Banks in Distress

FairStock's Altman Z-Screen doesn't do polite. It runs the numbers and flags the outliers. This week, the screen puts [LICI](/stock/LICI) (NSE: LICI) at -0.83. That is not a typo. It's negative. Seven public sector banks land between 0.33 and 0.37. The standard distress threshold is 1.8. Every one of these names sits well below it. The Altman Z-Screen isn't a default predictor for Indian banks or insurers. It's a balance-sheet stress map. The original model wasn't built for financial sector balance sheets. Banks don't have the same working capital or retained earnings profile as industrial firms. But FairStock runs the data anyway, because equity investors ignore bank leverage at their own risk. The screen is separate from FairStock's composite FairStock Score. A weak Z-score doesn't automatically mean a weak overall rating. What the Altman Z-Screen Shows The screen puts [LICI](/stock/LICI) at -0.83, which is lower than any of the seven PSU banks. Negative Z-scores are rare. They suggest the market sees no cushion between the insurer's liabilities and the value of its assets. LICI's stock has had a rough ride since its 2022 listing. This screen adds another data point to that story. The seven banks flagged are [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). Their Z-scores run from 0.33 to 0.37. For context, any score below 1.8 is considered distress territory. These names aren't near the line. They're far below it. PSU Banks: The Numbers Behind the Flag The D/E ratios sit between 10.39 and 14.67. That range is not a rounding error. A bank runs on leverage. Deposits are liabilities. But when equity is this thin relative to debt, a small asset-side shock ...