International Conveyors Shares Rise After Acquiring ₹5.50 Cr Stake in La Opala RG & CDSL
International Conveyors Limited (ICL), the second-largest manufacturer of PVC solid woven belting, witnessed a notable surge in its stock price following its strategic investment in La Opala RG Ltd and Central Depository Services (India) Ltd (CDSL). The company’s shares gained up to 2% after the announcement, reflecting strong investor sentiment toward its latest financial moves.
Stock Price Movement
ICL, which has a market capitalization of ₹457.58 crore, saw its stock trading at ₹67.79 per share, up 0.82% from the previous close of ₹67.89 apiece. This uptick highlights investor confidence in the company’s strategic investment decisions.
Investment Details: A Strategic Move
International Conveyors has made a significant investment of ₹5.50 crore in two well-established companies:
- Central Depository Services (India) Ltd (CDSL): Acquired 27,228 equity shares worth ₹2.95 crore
- La Opala RG Ltd: Acquired 1,29,685 equity shares worth ₹2.65 crore
This investment is part of ICL’s long-term financial strategy, focusing on capital allocation in strong and fundamentally sound businesses.
Financial Performance: A Strong Growth Trajectory
ICL has demonstrated steady financial growth, as reflected in its latest quarterly results:
- Revenue Growth: Increased by 13% from ₹23 crore in Q3FY24 to ₹26 crore in Q3FY25.
- Net Profit Growth: Expanded by 5% from ₹19 crore to ₹20 crore in the same period.
Ratio Analysis: Evaluating ICL’s Market Position
ICL’s valuation and financial ratios indicate that the stock remains undervalued compared to industry standards:
| Financial Metric | Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 5.05 (Industry Avg: 33) |
| Debt-to-Equity Ratio | 0.28 |
| Return on Equity (ROE) | 22.85% (up from 13.36%) |
| Return on Capital Employed (ROCE) | 30.40% (up from 19.07%) |
| Net Profit Margin (NPM) | 46.58% |
A P/E ratio of 5.05, significantly lower than the industry average of 33, suggests that ICL is undervalued, presenting a potential buying opportunity for investors.
Strong Client Base: A Testament to Quality
ICL serves a robust international and domestic clientele, reinforcing its strong market position. Some of its key clients include:
- International Clients: Nutrien™, BELTSERVICE CORPORATION, Mosaic, GLENCORE, Rosebud Mining, Peabody, BELT TECH, Conveyor Specialists, VIACORE, DARTBROOK.
- Domestic Clients: Shree Cement, SMS, SCCL, TATA Steel, JMS, Coal India.
Company Overview: A Leader in Conveyor Belting
International Conveyors Limited is a leader in manufacturing and marketing solid woven carcass reinforced fire retardant antistatic (FRAS) PVC Conveyor Belting, catering to explosive fire-hazardous underground mine applications.
Key Stock Data:
| Metric | Value |
|---|---|
| Market Cap | ₹435 Cr |
| Current Price | ₹68.6 |
| 52-Week High / Low | ₹111 / ₹61.2 |
| Stock P/E | 5.11 |
| Book Value | ₹52.5 |
| Dividend Yield | 1.60% |
| ROCE | 23.8% |
| ROE | 23.8% |
| Face Value | ₹1.00 |
Why This Investment Matters?
ICL’s decision to invest in La Opala RG and CDSL reflects its approach to capital diversification and long-term growth. La Opala RG is a leading player in the glassware industry, while CDSL is a critical entity in India’s financial markets, making them strategic investment choices.
Q&A: Quick Insights from the Article
Q1: Why did International Conveyors’ share price increase?
A: The stock price surged after the company announced its investment of ₹5.50 crore in La Opala RG Ltd and CDSL.
Q2: How much did ICL invest in La Opala RG and CDSL?
A: ICL acquired ₹2.95 crore worth of shares in CDSL and ₹2.65 crore worth of shares in La Opala RG.
Q3: How is ICL’s financial performance?
A: ICL’s revenue grew 13% YoY, while net profit increased by 5%. It also has a high net profit margin of 46.58%.
Q4: Is International Conveyors undervalued?
A: Yes, with a P/E ratio of 5.05 (much lower than the industry average of 33), the stock appears undervalued.
Q5: What is ICL’s return on equity (ROE) and return on capital employed (ROCE)?
A: ROE is 22.85%, and ROCE is 30.40%, indicating strong financial efficiency.
Q6: Who are ICL’s key clients?
A: Major international clients include Nutrien™, Peabody, and Mosaic, while domestic clients include Coal India, TATA Steel, and Shree Cement.
Q7: What industry does International Conveyors operate in?
A: ICL manufactures and markets fire retardant antistatic PVC Conveyor Belting used in underground mines.
Final Thoughts
ICL’s investment in two well-established companies signals a strategic growth move, positioning itself for long-term value creation. With strong financials, a stable client base, and an undervalued stock, ICL remains a stock to watch for investors seeking growth opportunities.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.