KEYTAKEAWAYS FROM ANNUAL REPORT OF ICRA LIMITED 2017-18

Our comments
 ICRA – The business of the company is like that of Chartered Accountant who is paid for signing
documents. Similarly, ICRA is paid for rating/grading its clients. The assets of ICRA kind of
businesses are - reputation in the market, brand name, employees & quality of research work
before rating the clients.
 Mandatory regulatory requirment for ratings to bond, commercial paper, debt instruments, etc
bring good amount of revenue. Not only securities other numerous ratings include corporate
governance rating, governance rating, project finance rating etc. So multiple services reduce
concentraton risk. Moreover, ICRA provide research report services to banks, mutual funds etc.
 ICRA have diverse set of clients from almost all sectors manufacturing, services, construction,
martime etc thereby reducing dependency on any one particluar sector.
 The business is also dependant on the regulatory requirement of government agencies & well
being of financial industry.

Conclusion
 Business is good but it is very difficult to find out how one “rupee” is earned from these kind of
businesses. One would not able to asses the the cost of service as it is variable from clients to
clients. Also it would be difficult to value intangible assets in form of brand name. Morover, the
doubtful environment existing around such kind of companies cannot be neglected. For primary
research these kind of companies are dependant on third parties or the information provided by
the clients there is doubt on the reliability of the data. The regulatory environment and financial
conditions define the business of such companies. Instead of all these - there is lot of scope for
such businesses and it is also difficult to copy the model as it requires years of hardwork and is
subject to regulatory approval. Diverse services and diverse set of clients reduces concentration
risk.

visit us at - h t t p : / / w w w . h e d g e h o g i n v e s t i n g . c o m
KEYTAKEAWAYS FROM ANNUAL REPORT OF ICRA LIMITED 2017-18

visit us at - h t t p : / / w w w . h e d g e h o g i n v e s t i n g . c o m
KEYTAKEAWAYS FROM ANNUAL REPORT OF ICRA LIMITED 2017-18

visit us at - h t t p : / / w w w . h e d g e h o g i n v e s t i n g . c o m
 KEYTAKEAWAYS FROM ANNUAL REPORT OF ICRA LIMITED 2017-18

10 lakhs invested with us in Jan-2015 has become Rs 26.4 lakhs in June 2017 at a CAGR of 48%

Past Performance Returns

KRBL Ltd 457%

Edelweiss Ltd 325%

Mirza International Ltd 307%

Canfin homes Ltd 300%

Manappuram Finance Ltd 242%

Indiabulls Real estate Ltd 183%

About Hedgehog Investing

Hedgehog investing is a group of PASSIONATE FULL TIME INVESTORS, which are behind finding great companies early. Unique
expertise in teaching and digging up more companies allows Hedgehog investing to help our clients achieve their Investment goals
with lowest risk.

Investment Philosophy
Our investment philosophy is inspired from Hedgehog – known for simplifying the complex situation.

Wait for the pitch - The stock market is a no-called-strike game. You don’t have to swing at everything–wait for your sweet spot and
then swing hard with everything you’ve got.
Taking advantage of market inefficiency -We limit our efforts to the inefficient markets where hard-work and skill would pay off the
best.
Timing the market - We do not believe in the predictive ability required to correctly time markets.
Circle of competence - We like to invest in businesses that are simple, run by talented and honest management, which are cash
generating.
We buy businesses not stocks - We buy into a company because we want to own it, not because we want the stock to go up. We
believe if we buy good businesses stocks will eventually follow.
Margin of safety - We give higher priority for preventing losses. If we avoid losers, the winners will take care of themselves.
Buy right and sit tight - We would like to remain with few good long-term choices rather than frequently shifting from one to
another.
Consistency in performance - It is our belief that superior record is built on a high batting average rather than a mix of brilliant
successes and dismal failures.

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