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 39mn in the last 12 months, up 72% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 59% from FY24 to INR 1.08.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 9ppts and its growth decelerated by 1ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

Historically, ICDSLTD.NS has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 36.0%, down from 38.5% in FY24. 

Another important profitability metric, return on assets (RoA), amounted to 4.5% in the last 12 months, an increase from 3.0% in FY24. 

In the last 12 months, the return on capital employed (RoCE) grew to 4.8%, below the peers. 

ICDS Limited reported a return on equity (RoE) of 4.9% in the last 12 months, up from 3.1% in FY24. 

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 resilient historical revenue growth, 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, negligible return on capital, and excessive margin volatility.

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. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is 'expensive' on P/E, neutral on EV/EBITDA, overpriced on P/FCF. 

ICDS Limited

₹ 56

2

ICDS Limited

₹ 56

2

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Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₹ 56

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