ICDS Limited engages in trading shares and securities, and mobiles and accessories in India. It also engages in the rental of investment properties; and marketing of life and general insurance products. The company was formerly known as Industrial Credit and Development Syndicate Ltd. and changed its name to ICDS Limited in December 1992. ICDS Limited was incorporated in 1971 and is headquartered in Manipal, India.

India

ICDS Limited

Real Estate

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

ICDSLTD.NS reported revenue of INR 23mn in the last 12 months, down 9% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 19% from FY23 to INR 0.68.

The stock has been growing steadily in the past six months, adding 17% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 22ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is positive. Usually, this means that a fairly valued or slightly undervalued stock has become more 'expensive', indicating that the market, in general, may have gained short-term confidence in the stock.

Another important profitability metric, return on assets (RoA), amounted to 3.0% in the last 12 months, a decrease from 3.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 3.0%, below the peers. 

ICDS Limited reported a return on equity (RoE) of 3.1% in the last 12 months, down from 3.5% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.6 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

ICDSLTD.NS has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note robust profitability, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, ICDSLTD.NS is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, ICDSLTD.NS is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

Considering past and projected metrics, the stock is distinctly 'expensive' compared to its peers. In particular, the stock is overpriced on P/E, 'expensive' on EV/EBITDA, overvalued on P/FCF. 

ICDS Limited

₹ 57.01

3

ICDS Limited

₹ 57.01

3

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Profitability factor

₹ 57.01

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