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Care Ratings Ltd. Stock Analysis

Small Cap
Evaluated by 2498 users | BSE: 534804 | NSE: CARERATING |
Ratings
Credit Analysis and Research was incorporated as Credit Analysis and Research Limited on April 21, 1993 at Mumbai, Maharashtra as a public limited company under the Companies Act. The Company commenced its business activities subsequent to receipt of certificate for commencement of business...
1. Right Stock
Very Good
2. Right Price
3. Right Time

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Care Ratings Ltd. has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Value Creation
Value Creation Index Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 34.33%28.64%26.05%25.5%27.98%30.33%29.15%27.71%21.68%12.63%
Value Creation Index NANA1.250.961.151.331.241.130.730.01
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 171178199229257265280322297219
Y-o-Y Gr. Rt.-4.2%11.6%15.4%12.1%3%5.9%14.7%-7.5%-26.3%
Adjusted EPS (Rs.) 31.3734.136.5439.9340.4439.6446.1552.8342.2823
Y-o-Y Gr. Rt.-8.7%7.2%9.3%1.3%-2%16.4%14.5%-20%-45.6%
Book Value per Share (Rs.) 106.03132.08148.46166.52121.97138.39177.91200.49179.31172.45
Adjusted Net Profit 89.697.410411611711713615612567.8
Net Op. Cash Flow (Rs. Cr.) 88.99882.3109107108123136111-29.4
Debt to Cash Flow from Ops 0000000000
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Care Ratings Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 2.8%-3.2%-7.9%-26.3%
Adjusted EPS -3.4%-10.7%-20.7%-45.6%
Book Value per Share 5.67.2-1-3.8
Share Price - -19.9% -36.5% -31.2%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 34.3328.6426.0525.527.7630.3329.1527.7121.6812.53
Operating Profit Margin (%) 76.3969.1767.4263.9363.0264.9966.3765.1257.634.94
Net Profit Margin (%) 52.4254.6752.4950.4745.5944.0148.4648.3941.8930.93
Debt to Equity 0000000000
Working Capital Days 121173349402433507888855710961
Cash Conversion Cycle 3232621131722294663
Corporate Governance What do we look at?
Corporate Governance
Board Credentials
Promoter's holding
Transparency
Integrity
Entity Percentage Holding
Institutions 52.86%
Non-Institutions 47.14%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Care Ratings and arrived at the following conclusion:

Past 10 year's financial track record indicates that Care Ratings is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Care Ratings's performance infers:

Care Ratings earnings have declined by -10.7%, whereas share price has depreciated -19.9% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

Data is not available for this company

Credit Analysis and Research was incorporated as Credit Analysis and Research Limited on April 21, 1993 at Mumbai, Maharashtra as a public limited company under the Companies Act. The Company commenced its business activities subsequent to receipt of certificate for commencement of business dated May 27, 1993. The company has one subsidiary, namely, CARE Kalypto Risk Technologies and Advisory Services Private Limited. The company acquired 6,020,540 equity shares of face value

Credit Analysis and Research was incorporated as Credit Analysis and Research Limited on April 21, 1993 at Mumbai, Maharashtra as a public limited company under the Companies Act. The Company commenced its business activities subsequent to receipt of certificate for commencement of business dated May 27, 1993. The company has one subsidiary, namely, CARE Kalypto Risk Technologies and Advisory Services Private Limited. The company acquired 6,020,540 equity shares of face value of Rs 10 each of Kalypto representing 75.13% of the issued and paid-up share capital of Kalypto, pursuant to a share sale and purchase and shareholders’ agreement dated November 22, 2011.

Business of the Company:

Credit Analysis and Research (CARE), a leading, full service credit rating company, is the second largest rating company in India in terms of rating turnover, for the year ended March 31, 2012. The company offers a wide range of rating and grading services across a diverse range of instruments and industries. It also provides general and customized industry research reports. Since incorporation in April 1993, the company has completed 19,058 rating assignments and has rated Rs 44,036.03 billion of debt as of September 30, 2012. The company had rating relationships with 4,644 clients as of September 30, 2012. Further, its existing shareholders include domestic banks and financial institutions, such as IDBI Bank, Canara Bank, SBI and IL&FS, among others. The company has one subsidiary, namely, CARE Kalypto Risk Technologies and Advisory Services, which is engaged in the business of providing risk management software solutions and offers products with exclusive focus on banking and financial services domain and addressing the areas of enterprise risk management.

The company’s primary focus has been to provide credit rating services in India. It has over 19 years of experience in rating debt instruments and related obligations covering a wide range of sectors, such as manufacturing, services, banks and infrastructure. Its list of clients includes banks and other financial institutions, private sector companies, central public sector undertakings, sub-sovereign entities, small and medium enterprises (“SMEs”) and micro-finance institutions, among others.

The company is well equipped to rate most kinds of short, medium and long-term debt instruments, such as commercial paper, bonds, debentures, preference shares and structured debt instruments; bank loans and facilities, both fund-based and non fund-based; and deposit obligations, such as inter-corporate deposits, fixed deposits and certificates of deposit. It also provides issuer ratings and corporate governance ratings and have rated innovative debt instruments, such as perpetual bonds.

The company also has experience in providing specialized grading services, including IPO grading, equity grading, and grading of various types of enterprises, including ESCO, RESCO, shipyards, maritime training institutes, construction companies and rating of real estate projects, among others. It is the leading credit rating agency in India for IPO grading, having graded the largest number of IPOs since the introduction of IPO grading in India. Some of it’s grading services has been formulated pursuant to a statutory or regulatory regime applicable to the particular sector, such as the ESCO grading under accreditation by the Bureau of Energy Efficiency and the RESCO grading under the aegis of the Ministry of New and Renewable Energy.

Major events of the Company:

1993-94 Commenced rating operations

1996-97- Expansion of ratings operations to rating of toll roads, electricity board, municipal corporations, structured instrumentsCompleted nine studies on central public sector undertakings selected for disinvestment for the Disinvestment Commission

1997-98- Launched ‘CARE Loan Rating’ for rating term loans

1998-99- Started rating of debt mutual funds

1999-2000- Launched rating for two structured products: bonds backed by real-estate receivables and collateral of shares

  • Obtained registration with SEBI under the CRA Regulations

2001-02 Founding member of ACRAA

2002-03- Launched corporate governance and value creation rating

2004-05- Signed MoU with NSIC for empanelment as an approach rating agency for SSIs

2005-06- Launched new products such as rating of SMEs, SSIs, mutual funds, issuer rating and IPO grading

2006-07- Developed grading methodology for ultra mega power projects, urban local bodies, infra projects at pre-bid and post-bid stages and micro financial institutions

2007-08- Executed MoUs with 19 banks to provide rating facilities under Basel II framework

  • Commenced providing technical assistance to a rating agency in Mexico
  • Received mandate from Ministry of Urban Development for rating of 13 urban local bodies under Jawaharlal Nehru National Urban Renewal Mission

2009-10- Established CARE Knowledge Centre at Ahmedabad

  • Commenced providing technical assistance to credit rating agency in Ecuador

2010-11- Acquired license to operate credit rating operations in Maldives

  • Launched new products including equigrade, ESCO grading, RESCO grading and financial strength grading of shipyards, edugrade and real estate project star ratings
  • Rated a perpetual bond issued by a non financial services corporate company

2011-12- Acquisition of 75.13% of the issued and paid up equity share capital of Kalypto

Registrations, Recognitions and Accreditations:

The company is registered with SEBI as a credit rating agency under the CRA Regulations. It is recognized by RBI as an eligible credit rating agency whose ratings may be used by banks for assigning risk weights for credit risk for the implementation of Basel II in India. It is also recognized by RBI for rating fixed deposits of NBFCs and commercial paper and by other statutory authorities and agencies in India for rating and grading services, such as the Ministry of Petroleum and Natural Gas (for LPG/SKO ratings), the Ministry of Defence (for shipyard grading), Directorate General of Shipping (for maritime training institutes grading) and the National Small Industries Corporation Limited (the “NSIC”) (for MSE ratings), among others.

The company has been granted indirect recognition by the Hong Kong Monetary Authority as an external credit assessment institution for the purposes of the regulatory capital framework in Hong Kong. It has also been recognized by Bank of Mauritius for using company’s ratings for risk weighting of bank claims on corporates for capital adequacy purposes.

CARE follows best practices for the industry and adhere to the code of conduct set out by IOSCO and the Association of Credit Rating Agencies in Asia. The rating agency have received ISO 9001:2008 quality management certifications for it’s head office in Mumbai and six branch offices for the credit rating of debt instruments and facilities, for research services at it's head office in Mumbai and for data processing at the CARE Knowledge Centre in Ahmedabad.

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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