Heckyl Risk Analytics

News Sentiment for 50+ Companies from BSE 500 Hits 2-Year Low

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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 company. The application of news data in the risk assessment of corporate borrowers helps in capturing important events and red-flags which can have impact on the company’s operations at a later date.

In our view, a significant drop in the company’s news sentiment can be a potential red-flag and at the same time, an early warning signal of future under-performance.
  
Our analysis of news data has shown a steep decline in sentiment score for 50+ companies from BSE 500 Index to a 2-year low. Here, we present the heat-map for top 20 companies witnessing significant drop in news sentiment score.

Heatmap

Minda Industries is one such company recording a decline in news sentiment score to 2-year low. The sentiment score turned negative after the company announced the closure of both the Indian and global manufacturing facilities due to Coronavirus pandemic. We have presented the trend of sentiment score below:

Minda Inds - Sentiment

Closure of manufacturing plants, negative stock commentaries and weak earnings dominated the adverse media coverage around Minda Industries in this year. We have listed some of the negative news items on the company below:

Minda Inds

Heckyl’s Risk Analytics System (RAS) is the first of its kind innovative application that provides early warning signals through analysis of traditional and alternative datasets for identifying distress sectors and companies ahead of time.

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

Heckyl RAS Spots Multiple Red-Flags on Alternative Data Ahead of Deterioration in Financials

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The deterioration in financials of the company did not happen overnight. There are one or more events happening internally and/ or externally in a span of time that could hamper the company’s operations. Moreover, the impact of events is known only at the later stage after the announcement of financial results.

Tracking multiple events involving the large number of corporate borrowers in portfolio is a daunting task. In our view, the analysis of Alternative Datasets such as PF, Ownership, Directors, News Sentiment, Credit Rating, GST, Charges etc. can offer an Early Warning Signal to spot deterioration in financials ahead of time.

Heckyl’s Risk Analytics System (RAS) offers 360-Degree view on Risk Assessment of Portfolio Companies by capturing and analyzing 1. Delay in Employees’ Provident Fund (PF) contribution; 2. Adverse Media and News Sentiment; 3. Changes in the Promoter Ownership or Pledging; 4. Director Resignations; 5. Delay in GST filing; 6. Credit Rating; and 7. Creation of New Charge on Assets in addition to Financial Data.

Here, we highlight the top 10 companies which have witnessed multiple red-flags ahead of decline in Financial Score.

Timeline_Concise
RAS is the first of its kind innovative application that provides early warning signals through analysis of traditional and alternative datasets for identifying distress sectors and companies ahead of time.

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

PF data acts as a leading indicator for identifying distressed companies: Heckyl study

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Companies from consumer services, industrials and financial sectors lead drop in PF score in FY20

Publicly available data from Employees’ Provident Fund Organization (EPFO) is one of the datasets that can be very useful to gain unique insights in the assessment of credit risk. In our view, a significant delay in monthly Provident Fund (PF) payment is a potential red-flag as the delay could be due to liquidity crunch faced by the company. Moreover, a substantial drop in the number of employees or amount paid for PF is also a potential red-flag as it signals layoffs or job cuts to reduce the company’s operational cost.

Heckyl’s Risk Analytics System (RAS) has several business rules to identify such red-flags from PF data. Based on the rule output of the PF module for the company, Heckyl system computes the PF score.

Heckyl study on PF data for 1,000 companies has shown a drop in the PF score for 540+ companies during the financial year 2020. The companies from consumer services, industrials, financial institutions, commercial services and chemical sectors have led the drop in the PF score for the FY20.

Sector-wise PF Score

Moreover, 310+ companies, which have witnessed a fall in the PF score, have subsequently seen declined in the scores for other modules of RAS such as Financial, Charges, Credit Rating, Directors, Ownership, and GST. Read the rest of this entry »

Auto, Transportation, Consumer Services, Industrials and IT Sectors Hit Hard by Coronavirus

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In January this year, China witnessed an outbreak of Coronavirus which has now infected more than 8,50,000 people globally. So far, Coronavirus has claimed the lives of more than 42,000 people. The rapid spread of Coronavirus across 199 countries and territories has forced the governments announced the lockdowns. Almost all the sectors were impacted by the lockdowns.

Analysis of unstructured datasets such as News can be very useful to unravel red-flags such as plant shut down, layoffs, supply disruption, lawsuits, drop in earnings, product recalls, regulatory actions etc. ahead of time.

We conducted analysis of news data on Coronavirus to measure its impact on the sectors. Our analysis showed that Automobile, Transportation, Consumer Services, Industrials and Software & Services were the worst hit sectors due to lockdown announced by Indian government to stop the spread of Coronavirus.

Sector News Vol Read the rest of this entry »