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To promote the Telecom Industry in India, the Government had established a PSU, Indian Telephones Industries Limited (ITI Ltd.) in the year 1950. It aimed at accommodating the nation's demand for defense and communication devices for almost 50 years. However, the major developments including the New Economic Policy in 1991 increased competition, which significantly impacted the profitability level of ITI Ltd. It was filed under Sick Industrial Companies Act (SICA) in 2003 and reported losses for 14 years. The impact of the Great Depression on firms compelled Professor Edward Altman to propose a bankruptcy prediction model, i.e.: Altman's Z-Score Model, which provided financial implications. Thus, through a case study approach, this study aimed to understand if ITI Ltd. had used an effective tool like Altman Z-Score Model, would it implicateon the financial health beforehand. Profitability ratio analysis and the model were used for the purpose. The Z-Scores using financial data for 22 years revealed that ITI Ltd. was at the Grey Zone prior to insolvency. The findings proved that application of financial models would play a major role in predicting bankruptcy. It will facilitate in reviewing the effectiveness of existing strategies, with a view to eventually meet stakeholders' interests. [ABSTRACT FROM AUTHOR]