Mehabe score: 5 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency.# It is involved in rating, management consulting and outsourcing and information services etc.#
Main Points
Range of Services
Ratings Services – ICRA is one of the most experienced credit rating agencies in India. It rates debt instruments issued by manufacturing companies, commercial banks, non-banking finance companies, financial institutions, public sector undertakings and municipalities, among others.Site:ICRAMain Symbol:ICRA
Stock trades at 3659.0, above its 50dma 3427.74. It also trades above its 200dma 3106.96. The stock remains bullish on techicals
The 52 week high is at 4158.60 and the 52week low is at 2479.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 28.82%
Weakness
– The company has delivered a poor sales growth of -2.47% over past five years.
– has a low return on equity of 13.78% for last 3 years.
-Earnings include an other income of Rs.42.85 Cr.
Competition
– The industry trades at a mean P/E of 40.4x. CRISIL trades at the industry’s max P/E of 54.1x. ICRA trades at a P/E of 43.6x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 8.0. ICRA has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 7.4%. The max 1- month return was given by ICRA: a return of 13.06 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 80.0 cr compared to Rs 70.0 cr for period ended Jun 2020, a rise of 14.3%
Operating Profits reported at Rs 25.0 cr for period ended Jun 2021 vis-vis 15.0 for period ended Jun 2020 .
Operating Margins expanded 982.1 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 24.82 compared to Rs 23.0 for previous quarter ended Mar 2021 and Rs 17.43 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 311.0 cr for period ended TTM vis-vis sales of Rs 301.0 cr for the period ended Mar 2021, a growth of 3.2%. The 3 year sales cagr stood at -1.8%.
Operating margins expanded to 29.0% for period ended TTM vis-vis 27.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 89.0 cr for period ended TTM vis-vis sales of Rs 82.0 cr for the period ended Mar 2021, rising 7.9%.
Company reported a poor Net Profit CAGR of -5.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 76.0 cr for period ended Mar 2021 vis-vis Rs 21.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 46% on a 1 Year basis vis-vis a return of 6% over the last 3 Years. – The compounded sales growth on a TTM bassis is -6% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is -16% vis-vis a compounded profit growth of -6% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 9.76% vis-vis 9.76% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 9.1% vis-vis 8.74% for Mar 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 28.82% – The company has delivered a poor sales growth of -2.47% over past five years.
– has a low return on equity of 13.78% for last 3 years.
-Earnings include an other income of Rs.42.85 Cr.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 3427.74 and is trading at 3659.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
