Current Rating and Its Significance
The 'Strong Sell' rating assigned to Indian Card Clothing Company Ltd indicates a cautious stance for investors, signalling significant concerns across multiple evaluation parameters. This rating is based on a comprehensive assessment of the company's quality, valuation, financial trend, and technical outlook. It suggests that the stock is expected to underperform relative to the broader market and peers, and investors should consider this risk carefully when making portfolio decisions.
Quality Assessment
As of 25 December 2025, the company’s quality grade remains below average. Indian Card Clothing Company Ltd continues to report operating losses, which undermines its long-term fundamental strength. The company’s ability to service debt is notably weak, with an average EBIT to interest ratio of -4.19, indicating that earnings before interest and taxes are insufficient to cover interest expenses. This poor coverage ratio raises concerns about financial stability and sustainability.
Moreover, the company has reported a negative return on capital employed (ROCE), reflecting inefficient use of capital and a lack of profitability. These factors collectively contribute to the low quality grade and reinforce the cautious rating.
Valuation Considerations
Valuation metrics as of today classify the stock as risky. The company’s negative EBITDA and operating cash flows highlight ongoing operational challenges. Despite the stock generating a return of -29.75% over the past year, profits have paradoxically risen by 10.3%, resulting in a PEG ratio of 0.9. While a PEG ratio below 1 can sometimes indicate undervaluation, in this context it reflects inconsistent earnings growth amid deteriorating operational performance.
Investors should note that the stock is trading at valuations that do not adequately compensate for the risks posed by its financial health and market position, justifying the 'Strong Sell' stance.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend and Performance
The latest data as of 25 December 2025 shows a deteriorating financial trend. The company reported operating cash flow for the year at a low of ₹-17.32 crores, signalling cash burn and operational inefficiencies. Profit after tax (PAT) for the latest six months stands at ₹7.70 crores but has declined by 42.61%, indicating shrinking profitability.
Inventory turnover ratio for the half-year is at a low 3.68 times, suggesting slower movement of stock and potential issues with working capital management. These financial indicators highlight the challenges Indian Card Clothing Company Ltd faces in maintaining operational efficiency and profitability.
Technical Outlook
From a technical perspective, the stock is graded bearish. Price performance over various time frames confirms this negative trend. As of 25 December 2025, the stock has declined by 2.43% in a single day and 7.09% over the past month. Over the last three months, it has fallen 9.09%, and over six months, the decline deepens to 26.46%. Year-to-date returns are negative at -25.98%, and the one-year return stands at -29.75%.
Furthermore, the stock has underperformed the BSE500 index over the last three years, one year, and three months, reinforcing the bearish technical grade. This sustained underperformance suggests weak investor sentiment and limited near-term recovery prospects.
Implications for Investors
For investors, the 'Strong Sell' rating on Indian Card Clothing Company Ltd serves as a warning signal. The combination of weak quality metrics, risky valuation, negative financial trends, and bearish technical indicators suggests that the stock carries significant downside risk. Investors should carefully evaluate their exposure to this microcap company within the Garments & Apparels sector and consider alternative opportunities with stronger fundamentals and more favourable market dynamics.
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Company Profile and Market Context
Indian Card Clothing Company Ltd operates within the Garments & Apparels sector and is classified as a microcap stock. Its modest market capitalisation and ongoing operational challenges place it at a disadvantage compared to larger, more financially robust peers. The company’s Mojo Score currently stands at 3.0, reflecting the overall weak outlook and justifying the 'Strong Sell' Mojo Grade.
Investors should note that the rating and analysis provided by MarketsMOJO incorporate a holistic view of the company’s financial health, market performance, and technical signals, aiming to guide informed investment decisions.
Summary
In summary, Indian Card Clothing Company Ltd’s 'Strong Sell' rating as of 18 August 2025 remains firmly supported by the latest data as of 25 December 2025. The company’s below-average quality, risky valuation, negative financial trends, and bearish technical outlook collectively indicate significant challenges ahead. Investors are advised to approach this stock with caution and consider the broader market context before committing capital.
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