This micro-cap semiconductor stock, which is engaged in providing automotive retail solutions, interactive media content, and enterprise software, serving clients across North America, Europe, and Asia, is down 58 percent from its 52-week high, and investors are now wondering if it will fall further after entering ESM Stage 2.
Stock Price Movement:
With a market capitalization of Rs. 387.51 crores, the shares of IZMO Limited hit a 2 lower circuit of Rs. 273.90 per share on Thursday, down from its previous closing price of Rs. 279.45 per share. Over the last six months, the stock has given a return of 39.14 percent.
Company Overview:
Izmo Limited is an India-based company that provides automotive retail solutions and interactive media content for the industry. It offers e-retailing services like online stores, car animations, marketing programs, CRM, and ILM solutions across North America, Europe, and Asia. The company also specializes in enterprise software, offering connectivity and security products from Open Text.
Should you still hold?
The shareholders of IZMO Limited should be aware of the fact that it is currently trading in ESM Stage 2 because its stock price declined over 57.91 percent from its 52-week high of Rs. 650.70 following cites of uncertainity. This measure is intended to prevent sharp price swings, control excessive speculation, and safeguard investor interests.
What is ESM and its stages?
The Enhanced Surveillance Measure (ESM) is a system introduced by Indian stock exchanges to monitor stocks that show unusual price changes, extreme volatility, or signs of excessive speculation. The main goal of ESM is to protect investors by applying stricter trading rules to such stocks.
The ESM framework has two stages, with Stage 2 being stricter than Stage 1. In ESM Stage 2, trading is allowed only in the trade-to-trade segment, meaning every transaction must result in the delivery of shares, and intraday trading is not permitted. This rule helps reduce speculation and ensure stable trading activity. Stocks in ESM Stage 2 may also have limited trading time slots, reducing liquidity as fewer traders participate under these conditions.
Management Guidance:
IZMO Limited’s management has set an ambitious growth target of 25-30 percent for its FrogData segment in H2 FY25, aiming for 50-75 percent year-on-year growth over the next two years, reflecting strong confidence in its business pipeline.
The company expects to maintain a gross margin of 30-40 percent, especially in its IZMOMicro segment. IZMO Micro Systems, a new subsidiary focused on EV technologies, projects revenue of Rs. 5-10 crore by FY25 and Rs. 30-50 crore by FY26, supported by its SIP manufacturing facility in Bangalore.
Semiconductor Business
IZMO Limited’s semiconductor business is poised for significant growth, with projected revenue of Rs. 30-40 crores by FY26, driven by automotive clients. Current revenue from this segment is expected to reach Rs. 5–6 crores by FY25.
Expansion and Acquisition:
IZMO is driving growth through strategic expansion and acquisitions. It has launched a Spanish-language platform to capture the U.S. Hispanic automotive market, already attracting over 2,000 dealers.
Furthermore, the acquisition of Geronimo Web boosts its presence in Europe and Latin America, reinforcing IZMO’s position as a leading digital platform provider for automotive marketing.
Recent quarter results and ratios:
IZMO Limited’s revenue increased from Rs. 50.21 crore in Q3 FY24 to Rs. 58.67 crore in Q3 FY25, reflecting a 16.85 percent year-on-year growth. The company’s net profit decreased by 11.92 percent, from Rs. 6.88 crore in Q3 FY24 to Rs. 6.06 crore in Q3 FY25.
Over the past five years, IZMO’s revenue and net profit have grown at a CAGR of 15.24 percent and 30.01 percent, respectively.
In terms of return ratios, the company’s ROCE (Return on Capital Employed) and ROE (Return on Equity) stand at 9.53 percent and 8.99 percent, respectively. The debt-to-equity ratio is extremely low at 0.01x, indicating the company is nearly debt-free. IZMO Limited’s earnings per share (EPS) is Rs. 35.9
Written By – Nikhil Naik
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