Heckyl RAS

Heckyl RAS Spots Green Shoots of Recovery in Indian Steel Sector

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Indian steel sector, which has been reeling under severe pressure due to production losses amid COVID-19 lockdown, is beginning to see the light at the end of the tunnel.

Heckyl’s analysis of news data for Indian steel sector has shown an improvement in positive news flow in four major categories – product pricing, production, earnings and imports/ exports in September 2020.

A surge in positive news flow under product pricing led to further improvement in the category sentiment for September 2020. In addition, production and imports/ exports categories have also seen improvement in the category sentiment.

Some of the steel sector news items, which pushed the sentiment higher in Sep-20, have been highlighted below:

2-Sep-20: Steel companies likely to announce price hikes in steel products
2-Sep-20: Steel under spotlight as price inches towards pre-Covid level
4-Sep-20: Fall in coking coal price to boost steel companies’ profit
5-Sep-20: Steelmaking costs to come down by $35/mt in Q2 of FY21, operating margins to improve by 5-6%: Icra
11-Sep-20: Indian Steel Mills Recorded Boosted Sales in August
14-Sep-20: Steel cos hike prices by ₹2,500 a tonne as demand revives in September
15-Sep-20: Steel prices to keep rising on industrial rebound; margins soft
16-Sep-20: Steel Price Hikes Signal More Supply Squeeze than Demand Surge

Unstructured data sets such as News is the first credible source of information that can offer insights into both the present and future prospects of the sectors and the companies. The application of news data in the risk assessment can help in capturing important events and red-flags for both the sectors and the portfolio companies.

Through the analysis of news, Heckyl RAS can help the banks to identify the best and the worst performing sectors ahead of time and thereby help them in rebalancing the sector allocation.

To know more about Heckyl RAS, email us at info@heckyl.com.

Auto, Utilities and Industrials Lead the Volume of Distressed Companies

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The analysis of Altman Z-score for 290 companies from BSE 500 index in Heckyl Risk Analytics System (RAS) revealed that Automobiles, Utilities and Industrials sectors have led the volume of distressed companies in the financial year 2020.

The Altman Z-score is the output of a credit-strength test that gauges the company’s likelihood of bankruptcy. This score measures the performance of the company on profitability, leverage, liquidity, solvency, and activity to predict whether the organization has a high probability of becoming bankrupt.

Based on the value of Altman Z-score, the company cab be classified into three zones. A Z-score above 2.99 suggests that a company is in the safe zone. A Z-score between 1.8 and 2.99 is in the grey zone which suggests there is a good chance of the company going bankrupt. Meanwhile, a Z-score below 1.80 is in the distress zone which indicates a high probability of distress.

Here, we present some of the highlights of Altman Z-score analysis for 290 companies from BSE 500 index which have declared the annual results for the financial year 2020:

#1. Manappuram Finance, Shoppers Stop and Bombay Dyeing fall into Distressed category

#2. Tejas Networks, HEG and AllCargo Logistics slip into Grey zone

#3. Distressed Cholamandalam Investment, Reliance Capital and Can Fin Homes register further Deterioration

Heckyl RAS does all the heavy-lifting to save the time spent by the risk teams at the banks on the collection of various datasets and complex number crunching and thereby helping them to spend quality time on the ready to use output of business rules, financial modules and risk scores.   

Heckyl RAS is the first of its kind innovative application that offers a 360-degree view on the portfolio of companies and individuals through analysis of the traditional and alternative datasets.

To know more about Heckyl RAS, email us at info@heckyl.com.

Heckyl RAS Perfect Partner for UCBs to Adopt System-based Asset Classification

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Heckyl Risk Analytics System (RAS) is the first of its kind innovative application that offers a 360-degree view on the portfolio of companies and individuals through analysis of the traditional and alternative datasets.

On Wednesday, the Reserve Bank of India asked urban cooperative banks (UCBs) to undertake the system-based asset classification from Jun. 30, 2021, to improve efficiency and transparency.

RAS runs hundreds of business rules on the various datasets such as financials, news, provident fund, GST, directors, ownership, credit rating, etc. to derive the overall risk score for each company/ individual from the portfolio. Based on the overall risk score, the portfolio companies are bucketed into a high, moderate, and low-risk profile.

In our view, RAS can act as the perfect system for UCBs to classify their assets into a. Standard Assets; b. Sub-standard Assets and c. Doubtful Assets.

Here, we have presented the Highlights screen of RAS for the portfolio of Nifty50 index companies.

Highlights screen

RAS not only provides the risk overview on the portfolio companies but also offers the option to dig deeper for the company level analysis. There are several other features (such as RBI Alerts screen, daily email newsletters for updates on portfolio companies, etc.) integrated into Heckyl’s application to make RAS a perfect partner for all types of banks.

To know more about Heckyl RAS, email us at info@heckyl.com.

 

Heckyl RAS Can Help Banks to Monitor Critical RBI Red Flag Alerts Seamlessly

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Heckyl has integrated RBI Alert screen in Risk Analytics System (RAS) which helps in the monitoring critical red flags defined by the central banks.

As per the RBI guidelines, the banks should have system which enables them to effectively monitor critical red flags on the portfolio companies. Some of the red flag alerts that the central bank has asked the banks to monitor are:

> Default in payment or bouncing of the high value cheques
> Raid by Income tax officials or other government authorities
> Escalation in project cost
> Resignation of the key personnel and frequent changes in the management
> Reduction in the stake of promoter / director

Our system has flagged news alerts on Eon Electric Ltd for default on payment of interest and repayment of principal amount under RBI Alert screen.

RBI Alerts

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Heckyl Risk Score Negative for 11 Companies from Nifty 50 Index

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Heckyl’s Risk Analytics System (RAS) has shown that the 11 out 50 Nifty companies have earned negative risk scores. The list of companies having negative risk scores was topped by Zee Entertainment, followed by Vedanta and Mahindra & Mahindra.

On the other hand, the Heckyl risk score has been the strongest for HDFC Bank in Nifty 50 companies. HDFC Bank was followed by HCL Technologies and Bajaj Finserv.

Image 1: Heatmap for Nifty 50

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