Understanding the Current Rating
The Strong Sell rating assigned to Indian Card Clothing Company Ltd indicates a cautious stance for investors, signalling that the stock is expected to underperform relative to the broader market and its sector peers. This recommendation is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal and risk profile.
Quality Assessment
As of 28 January 2026, the company’s quality grade remains below average. Indian Card Clothing Company Ltd continues to report operating losses, which undermines its fundamental strength. The firm’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 financial strain is further reflected in a negative return on capital employed (ROCE), signalling inefficient use of capital and diminished profitability. Such quality concerns suggest that the company faces structural challenges that may impede sustainable growth.
Valuation Considerations
The valuation grade for Indian Card Clothing Company Ltd is classified as risky. The stock trades at valuations that are less favourable compared to its historical averages, raising concerns about potential downside. Despite the stock generating a negative return of -25.62% over the past year, the company’s profits have risen by 10.3%, resulting in a price/earnings to growth (PEG) ratio of 0.8. While a PEG below 1 can sometimes indicate undervaluation, in this context it reflects a disconnect between market pricing and financial performance, compounded by the company’s ongoing losses and operational challenges.
Financial Trend Analysis
The financial trend remains negative, with recent quarterly and annual results underscoring the company’s difficulties. Operating cash flow for the year ended September 2025 was at a low of ₹-17.32 crores, highlighting cash burn issues. The profit after tax (PAT) for the latest quarter stood at ₹5.41 crores, marking a 35.0% decline compared to prior periods. Inventory turnover ratio for the half-year was also at a low 3.68 times, indicating slower movement of stock and potential inefficiencies in working capital management. These metrics collectively point to a deteriorating financial health that weighs heavily on investor confidence.
Technical Outlook
From a technical perspective, the stock exhibits a bearish trend. Price performance over multiple time frames has been disappointing. As of 28 January 2026, the stock’s returns include a 1-day gain of 3.91%, but this short-term uptick is overshadowed by longer-term declines: -0.26% over one week, -4.15% over one month, -12.20% over three months, -21.66% over six months, and -25.62% over the past year. The year-to-date return is also negative at -6.95%. This persistent downward momentum suggests that market sentiment remains weak, with limited technical support to reverse the trend in the near term.
Sector and Market Context
Indian Card Clothing Company Ltd operates within the Garments & Apparels sector, a space that has seen varied performance across companies. The company’s microcap status adds an additional layer of risk due to lower liquidity and higher volatility. Compared to broader indices such as the BSE500, the stock has underperformed consistently over the last three years, one year, and three months, reinforcing the cautious stance adopted by MarketsMOJO.
Implications for Investors
For investors, the Strong Sell rating signals that Indian Card Clothing Company Ltd currently presents significant risks that outweigh potential rewards. The combination of weak fundamentals, risky valuation, negative financial trends, and bearish technicals suggests that holding or accumulating this stock may not be advisable at this time. Investors seeking exposure to the Garments & Apparels sector might consider alternatives with stronger financial health and more favourable market dynamics.
Summary of Key Metrics as of 28 January 2026
- Mojo Score: 3.0 (Strong Sell)
- Market Capitalisation: Microcap
- Operating Cash Flow (Year): ₹-17.32 crores
- Profit After Tax (Quarter): ₹5.41 crores, down 35.0%
- Inventory Turnover Ratio (Half Year): 3.68 times
- EBIT to Interest Ratio (Average): -4.19
- Stock Returns: 1Y -25.62%, 6M -21.66%, 3M -12.20%
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Conclusion
Indian Card Clothing Company Ltd’s current Strong Sell rating by MarketsMOJO reflects a comprehensive evaluation of its present-day financial and market realities. Despite some short-term price gains, the company’s ongoing operating losses, weak debt servicing ability, risky valuation, and negative technical indicators collectively suggest that the stock is not positioned favourably for investors seeking stable or growth-oriented returns. Careful consideration and monitoring are advised before engaging with this stock, especially given its microcap status and sector challenges.
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