Financial health and credit risk of India’s listed automobile and auto-ancillary companies : An integrated financial diagnostics framework
*Sunita MallCorresponding authorsunitamall@micamail.inDepartment of Data ScienceMICAAhmedabad, Gujarat, 380058, India0000-0003-1050-2138View full profile → , Tushar Panigrahitushar@shantibschool.edu.inDepartment of Finance & EconomicsShanti Business SchoolAhmedabad, Gujarat, 380058, India0000-0002-7672-7156View full profile →
* Corresponding author · click or hover a name for details
- Received:
- 01 May 2026
- Published Online:
- 30 Sep 2026
- Article type:
- Research Article
- Language:
- EN
- Article no.:
- JSMS-1700
- Pages:
- 921–937
Abstract
This study assesses the financial health and credit risk of 18 NSE/BSE-listed Indian automobile firms (nine OEMs, nine ancillary suppliers) over FY2015–FY2026 using consolidated statements. Applying three-step DuPont analysis, it decomposes ROE into net margin, asset turnover, and equity multiplier, alongside Altman Z-Score, Beneish M-Score, and Piotroski F-Score for each company-year. OEMs show markedly higher average ROE (29.2%) and ROCE (26.0%) than ancillaries (11.6%, 14.6%) but carry over three times the leverage (debt-to-equity 1.15x vs. 0.33x). Ten firms fall in Altman’s “Safe” zone, eight in “Grey,” none in “Distress.” Average Piotroski F-Score is 5.6/9; Beneish M-Scores flag only Tata Motors and Bajaj Auto in specific restructuring or one-off income years, suggesting broadly clean earnings. Commercial-vehicle and tractor OEMs (Ashok Leyland, Tata Motors, M&M) exhibit weakest leverage–coverage profiles due to cyclicality, working-capital intensity, and (for Tata) JLR’s European costs. The paper offers a due-diligence workflow sequencing these tools and recommends the Ohlson O-Score as a complement to Altman for this cyclical, capital-intensive sector.
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References
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