CARERATING - CARE Ratings

📊 NSE: CARERATING 🏢 Miscellaneous 📅 Last Updated: 12/13/2025 20:43

💰 Financial Performance

Revenue Growth by Segment

Ratings business revenue grew 16% YoY to Rs. 205.75 Cr in H1 FY26, while the non-ratings segment recorded a strong 30% YoY growth to Rs. 24.53 Cr. For FY2025, consolidated revenue from operations reached Rs. 402.32 Cr, a 21.30% increase from Rs. 331.68 Cr in FY2024.

Geographic Revenue Split

Primarily India-focused, though the company is expanding its global footprint through 'CareEdge Global' with strategic MOUs in regions like Mauritius. Specific percentage splits by region are not disclosed in available documents.

Profitability Margins

Consolidated PAT margin stood at 33% in H1 FY26 (Rs. 83.71 Cr), while Standalone PAT margin was 39% (Rs. 84.95 Cr). For FY2025, consolidated PAT margin was 34.8% (Rs. 140.01 Cr), up from 30.9% in FY2024.

EBITDA Margin

Consolidated EBITDA margin was 42% in H1 FY26 (Rs. 96.30 Cr), up 24% YoY. Standalone EBITDA margin reached 57% in Q2 FY26 (Rs. 64.97 Cr), reflecting high operational efficiency in core rating services.

Capital Expenditure

Net Block of assets stood at Rs. 119.21 Cr as of March 31, 2025, representing a 10% increase from Rs. 108.82 Cr in FY2024, driven by investments in technology and infrastructure.

Credit Rating & Borrowing

Not disclosed as the company appears to be debt-free; Debt-Equity and Interest Coverage ratios are listed as Not Applicable (NA) in standalone financial summaries.

⚙️ Operational Drivers

Raw Materials

As a service-based agency, the primary 'raw material' is human capital; employee costs represent 46.9% of total revenue (Rs. 188.92 Cr in FY2025).

Import Sources

Not applicable for service-based credit rating operations.

Key Suppliers

Not applicable; the business relies on professional analysts and technological infrastructure rather than physical raw material suppliers.

Capacity Expansion

Not applicable in MT/MW; however, the company is expanding its 'rating universe' and geographical reach, resulting in an increase in new rating market share by count in FY2025.

Raw Material Costs

Employee costs, the primary operational expense, grew 14.79% YoY to Rs. 188.92 Cr in FY2025, reflecting investments in talent retention and skill upgrading.

Manufacturing Efficiency

Manufacturing efficiency is not applicable; however, debtors turnover ratio was 12.54x in FY2025, and the company is upgrading ML models to improve data extraction efficiency.

Logistics & Distribution

Not applicable for service-based operations.

📈 Strategic Growth

Expected Growth Rate

17-21%

Growth Strategy

Growth will be achieved by diversifying into non-rating segments (Analytics, Consulting, Sustainability) which now contribute 11% to revenue, and by capitalising on new SEBI mandates such as monitoring equity issuance proceeds. The company is also expanding globally via CareEdge Global and focusing on high-growth sectors like Infrastructure and BFSI.

Products & Services

Credit ratings for corporate bonds, commercial papers, and bank loans; Integrated Credit Platform (ICP) for risk analytics; ESG and sustainability assessments; Monitoring of equity issuance proceeds.

Brand Portfolio

CareEdge, CareEdge Ratings, CareEdge Global, CareEdge Analytics, CareEdge Advisory.

New Products/Services

Monitoring of equity issuance proceeds (market leader) and Past Risk and Return Verification Agency services (SEBI approved).

Market Expansion

Expanding into the International Financial Services Centre (GIFT City) and global markets like Mauritius.

Market Share & Ranking

Leading credit rating agency in India with a leadership position in Infrastructure and BFSI segments; securitisation volumes grew 55% in FY2025.

Strategic Alliances

Strategic MOUs with entities like the Mauritius Chamber of Commerce and Industry to drive global growth.

🌍 External Factors

Industry Trends

The industry is evolving toward integrated risk solutions and data analytics. Regulatory shifts, such as SEBI's 'Ease of doing business' initiatives and cyber security frameworks, are redefining operational standards.

Competitive Landscape

Operates in a regulated oligopoly; maintains leadership in Infrastructure and BFSI while facing competition from other domestic rating agencies.

Competitive Moat

Moat is sustained by mandatory regulatory requirements (SEBI/RBI accreditation) and high switching costs due to reputation. CareEdge's leadership in Infrastructure and high stability ratios provide a durable competitive advantage.

Macro Economic Sensitivity

Highly sensitive to GDP growth and private investment cycles; muted private investment in FY2025 impacted the core rating business growth momentum.

Consumer Behavior

Corporates are increasingly using commercial papers (issuances up 18.5% in H1 FY26) as a flexible funding tool compared to long-term bonds during yield volatility.

Geopolitical Risks

Global economic volatility and US reciprocal tariffs are identified as external headwinds that could impact domestic demand and corporate fundraising.

⚖️ Regulatory & Governance

Industry Regulations

Regulated by SEBI (CRA Regulations) and RBI (Basel-III framework). New mandates include monitoring equity issuance proceeds and adhering to the SEBI 'Cyber security and resilience framework' (2025).

Environmental Compliance

Not disclosed; service industry has low direct environmental impact.

Taxation Policy Impact

Effective tax rate of 27.1% in FY2025, with total tax expenses of Rs. 52.26 Cr on a PBT of Rs. 192.27 Cr.

⚠️ Risk Analysis

Key Uncertainties

Potential implementation of the Internal Rating Based (IRB) approach by RBI could make external ratings non-mandatory for some banks, impacting 89% of the company's revenue stream.