Historical Case Studies & Stress Backtests
Discover how Flagium's quantitative Early Warning System (EWS) evaluates balance sheet trajectory, governance stress, and capital adequacy over 12–20 quarters, with empirical backtests across major Indian corporate events and healthy sector benchmarks.
Historical Stress & Distress Backtests
Retrospective forensic investigations of Indian corporate defaults and balance sheet stress events.
Dewan Housing Finance Corporation Ltd (DHFL)
Flagium did not 'predict' the DHFL fraud. It detected the financial stress that the public record could reveal — and the backtest explicitly measures that boundary. A true point-in-time evaluation demonstrates that while 2,60,000 ghost accounts on an offline branch computer remained invisible in statutory filings, structural deterioration entered reported financial statements in Q3 FY19: Flagium erupted from 0 to 58 (F10 CAR Decay + F6 NIM Compression + F7 GNPA Creep + O1) and escalated to 64 in Q1 FY20 (4 simultaneous severe flags plus F7 Asset Quality) several quarters before RBI's historic Section 45-IE board supersession and the ₹87,000 Cr CIRP resolution. Public-data EWS identifies structural deterioration quarters in advance, but cannot be treated as a substitute for forensic investigation.
Yes Bank Ltd
YES Bank is one of the clearest historical commercial-banking stress cases in the Flagium archive. A sequential point-in-time backtest from Q1 FY16 through Q4 FY20 demonstrates that YES Bank's structural deterioration left an unmistakable statutory footprint years in advance. Serious deterioration does not begin with the first accounting loss: official RBI divergence disclosures of ₹10,531 Cr exposed severe asset classification discrepancies as early as 2017, consistent with delayed recognition of credit deterioration. Flagium sounded its initial Watch Band warning in September–December 2016 via provision starvation (Score 30–32, 39–42 months ahead) and escalated to Elevated Structural Stress at Score 68 in December 2017 (when the stock traded at ₹315, approximately eight months before reaching its all-time peak of ₹404 in August 2018) — providing exactly 27 months of lead time before the March 2020 statutory moratorium and SBI-led reconstruction (and 15 months before statutory accounting recognized its first net loss in Q4 FY19).
Rajesh Exports Ltd
Rajesh Exports provides the definitive case study of working capital deterioration in an apparent value stock. Traditional valuation metrics saw a low P/E ratio and high revenue; Flagium's Early Warning System detected cash conversion deficits, inventory accumulation, and receivables ballooning (+322%) 12 months ahead of the 96% profit collapse. Importantly, as receivables stabilized, Flagium automatically cooled the risk score to 12, demonstrating the engine's dynamic responsiveness.
Sector Risk Benchmarks
Calibration models across diversified Indian market leaders and sectors.
Kirloskar Oil Engines Ltd
Ujjivan Small Finance Bank
Tata Consultancy Services
Tata Steel Ltd
Divi's Laboratories
HDFC Asset Management
Larsen & Toubro Ltd
Bharti Airtel Ltd
Asian Paints Ltd
Cholamandalam Finance
How Flagium Evaluates Structural Risk
Explore our 6-pillar forensic framework, sector-specific capacity limits, and mathematical interaction models that power our Early Warning System.