ICRA (ICRA)

FairStock Score: 32/100 — RISKY

Score breakdown: P/E: 1/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Established credit-rating franchise with promoter holding of 51.87% aligning long-term interests.
• Strong return metrics: ROE 18.24% and ROCE 23.13% with Debt/Equity N/A, indicating a low-leverage balance sheet.
• Piotroski F-Score of 7/9 suggests solid profitability and financial health.
• Robust sales growth of 35.34% shows business momentum and market demand.

Concerns

• Profit growth of just 2.72% versus sales growth of 35.34% points to possible margin compression or rising costs.
• Valuation is expensive: P/E of 28.22 and P/B of 7.10 offer little margin of safety.
• Latest quarter profit of ₹39 Cr on revenue of ₹164 Cr translates to only a ~24% net margin, with no sign of profit acceleration.
• FairStock Score of 39/100 flags a mixed risk-reward at the current price.

AI Analysis

ICRA is the kind of business I like to study first: a credit-rating franchise with an entrenched position and pricing power. The numbers confirm a high-quality engine. It earns an ROE of 18.24% and ROCE of 23.13%, and Debt/Equity is N/A, so there is no leverage to keep me awake at night. A Piotroski score of 7/9 adds to my comfort. Promoters hold 51.87%, so owner and minority interests are reasonably aligned. Sales growth of 35.34% shows momentum. But Graham taught me to be equally skeptical. Profit growth is only 2.72% while sales rose 35.34%. That gap is a red flag. The latest quarter shows ₹164 Cr revenue and ₹39 Cr net profit, a margin near 24%, but if profit cannot follow revenue, competition or pricing pressure is at work. At ₹5,373.50, the stock trades at 28.22 times earnings and 7.10 times book value. That is a rich price for a business with modest current profit growth. The dividend yield of 1.08% offers little income cushion. PEG of 1.48 only makes sense if growth accelerates; using today's 2.72% number, the valuation offers little margin of safety. FairStock's 39/100 mixed score captures this tension. The 52-week range of ₹4,727 to ₹6,982 tells me the market is uncertain. ICRA is a fine franchise, but a fine franchise at a high price can still be a poor investment. I would wait for a better price or evidence that profit growth returns to double digits before acting. Price is what you pay; value is what you get.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer