01 — At a Glance
The Rating Company That Nobody Rates Anymore
- 52-Week High / Low₹7,135 / ₹5,015
- TTM Revenue₹561 Cr
- TTM PAT₹186 Cr
- TTM EPS₹191
- Q3 FY26 EPS₹40.22
- Book Value per Share₹1,127
- Price to Book4.66x
- Dividend Yield1.15%
- Debt / Equity0.01x
- 1-Year Return-3.09%
EduInvesting Opening Note: ICRA Ltd closed Q3 FY26 with ₹164 Cr quarterly revenue (+35.3% YoY), ₹40 Cr quarterly EPS, 23.1% ROCE, and a 1.15% dividend yield — meaning you earn ₹575 a year on a ₹50,000 investment. Meanwhile, the stock has returned -3% over 12 months. The rating business is booming. The stock is sulking. Welcome to the paradox that is Indian capital markets, where earnings can triple but your money still sits angry in a trading account.
02 — Introduction
The Company That Teaches Corporates How To Borrow, While Its Own Stock Borrows From Your Hopes
ICRA Limited. Established 1991. Moody’s controls 51.9% of your equity. The company rates ₹94.79 trillion of debt across India — basically, they know which company is going to default before the company’s CFO does. Yet, somehow, investors can’t decide if ICRA stock is overvalued, undervalued, or just permanently confused.
Let’s establish the reality: ICRA is a credit rating agency with real moats. They have 250+ analysts dissecting 60+ sectors, maintaining 2,631 live issuer ratings, and monitoring 1.9 lakh structured finance cases annually. They’ve acquired Fintellix in Oct 2025 for ₹253.25 crore to strengthen their risk analytics portfolio. Their operating profit margin hovers at 35–40%. And yet, the stock trades at 26.8x P/E while the industry median is 28.0x — which sounds cheap until you realise it’s because the Street is perpetually skeptical of rating agencies’ growth prospects.
Q3 FY26 showed explosive revenue growth (+35.3% YoY), but 70% of that came from the Fintellix acquisition contribution. Organic growth is real but slower. The ratings business grew 14.6%, and Research & Analytics grew 38% (including Fintellix). Margins compressed from 40% in Mar 2024 to 36% in Q3 FY26 — not catastrophic, but it’s the trajectory that matters.
Moody’s backing. Strong fundamentals. Acquisition-fueled growth story. And a stock that has returned -3% in a year while Nifty was busy being Nifty. Let’s dissect what’s actually happening inside this rating company.
Management Commentary (Jan 2026 Concall): “Revenue grew across businesses, strong momentum in Ratings led by bank credit, bond issuances moderated on YoY basis but improved sequentially.” Translation: Corporate India borrowed more money, made some of it from bonds, but overall lending picked up because GST rationalisation and rate cuts happened. ICRA made money rating all of it.
03 — Business Model: WTF Do They Even Do?
They Rate Debt. You Worry About Your Equity. Circle Complete.
ICRA’s business is gloriously simple: Companies and banks issue debt. They ask ICRA, “Is this bond safe?” ICRA assigns a rating (AAA, AA, A, BBB, whatever). Investors then decide whether they trust ICRA’s opinion. ICRA charges a fee. Everyone moves on. ICRA repeats this 2,631 times across 60+ sectors.
Revenue splits roughly 59% from Ratings & Ancillary Services and 41% from Research & Analytics. The Ratings business includes credit ratings for commercial paper, bank loans, bonds, structured finance, and fund ratings. The Research & Analytics segment includes industry reports, ESG ratings (since 2024), and, now, risk solutions via the Fintellix acquisition.
ICRA has subsidiaries in Sri Lanka (ICRA Lanka — 100% owned) and Nepal (IPL Nepal — 51% stake). International revenue is ~33% of total. So, they’re not just an India story; they’re a South Asian story that happens to be headquartered in Delhi.
The competitive landscape: CRISIL dominates with S&P backing. Care Ratings is the challenger. ICRA is the strong second. SMERA, BRICKWORK, and a dozen smaller agencies fight for crumbs. But ICRA has the Moody’s technical partnership, which is basically the cheat code in the rating game.
Ratings Business59%Of Revenue
Research & Analytics41%Of Revenue
International33%Of Revenue
Debt Monitored₹94.79TAcross India
Fintellix Acquisition (Oct 2025): ICRA paid ₹253.25 crore for 98.75% of Fintellix, a Bengaluru-based reg-tech and risk solutions firm. Fintellix brought ₹91 crore of annual revenue, 20% EBITDA margins, and 334 employees. In Q3 alone, Fintellix contributed ₹24.9 crore revenue and ₹4.8 crore EBITDA. It’s a bolt-on that immediately contributed to growth and margin. Whether it was a ₹250 crore well-spent or a ₹250 crore “let’s diversify” remains TBD.
💬 Real talk: Do you actually trust rating agencies, or do you just check what ICRA said and then make your own bet anyway?
04 — Financials Overview
Q3 FY26: The Growth Story Wrapped in Acquisition Tinsel
Result type: Quarterly Results | Q3 FY26 EPS: ₹40.22 | Annualised EPS (Q3×4): ₹160.88 | TTM EPS: ₹191
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 164 | 121 | 137 | +35.3% | +19.7% |
| EBITDA (Op. Profit) | 57 | 42 | 49 | +35.7% | +16.3% |
| EBITDA Margin % | 35% | 35% | 36% | 0 bps | -100 bps |
| PAT | 39 | 43 | 48 | -9.3% | -18.8% |
| EPS (₹) | 40.22 | 43.55 | 49.54 | -7.7% | -18.8% |
The Paradox Explained: Revenue is up 35.3% YoY, EBITDA is up 35.7%, but PAT is DOWN 9.3% and EPS is DOWN 7.7%. Why? Because Q3 FY25 had a one-time Labour Code benefit that inflated profits. Q3 FY26 does NOT have that benefit. Exclude that exceptional item from Q3 FY25 and adjusted PAT actually grew YoY. The headline numbers are confusing because of this one-off. Management disclosed this in the Jan 2026 concall, but the damage was already done — the quarterly sheet looks backwards on the surface.
05 — Valuation Discussion
Fair Value Range: What’s ICRA Actually Worth?
