CARE Ratings Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

CARE Ratings Ltd trades at ₹1,651, in a confirmed uptrend and 69 weeks into that stage. That is +1.0% against its own 200-day average. It sits at 51% of a 52-week range of ₹1,496 to ₹1,800. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (1 week and counting).

Today the stock is in a confirmed uptrend — week 69 of stage 2, confirmed. At ₹1,651 it trades +1.0% versus its 200-day average and sits at 51% of its 52-week range (₹1,496–₹1,800).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +86% while the NIFTY 500 moved +273% — behind the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (1 week and counting; last ahead the week of 2026-09-04) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

CARE Ratings Ltd's story is not scored yet against the markers our research file set on 31 May 2026. Where it sits in its own cycle: MID_EXPANSION. Still open: ~89% of revenue is ratings-derived; corporate bond issuances declined 3.2% full-year FY26 and 11.3% in Q4 — bank credit offset at 16.1% is durable only if macro cooperates.

Our read, 31 May 2026. India's second-largest credit rating agency completing a four-year turnaround: all subsidiaries now profitable, CATAL turned breakeven after Rs 24-25 Cr cumulative losses, operating leverage rebuilding OPM from 32% (FY22) to 42% (FY26) with international expansion generating top-10 global sovereign coverage.

From the numbers. P/BV at 5.2x vs 10Y median 4.8x (55th percentile). MID_EXPANSION — not a cheap entry setup. P/BV peaked at 10.1x in Dec 2016 (NBFC/bond market boom), troughed at 2.2x in Jun 2020 (COVID), recovered to 3.1x in Sep 2021…

From the price. Price stage 2, week 69 — above its 200-day line, relative strength rising.

From the research. India's second-largest credit rating agency completing a four-year turnaround: all subsidiaries now profitable, CATAL turned breakeven after Rs 24-25 Cr cumulative losses, operating leverage rebuilding OPM from 32%…

🚨 Where they disagree. P/BV at 5.2x vs 10Y median 4.8x (55th percentile). MID_EXPANSION — not a cheap entry setup. P/BV peaked at 10.1x in Dec 2016 (NBFC/bond market boom), troughed at 2.2x in Jun 2020 (COVID), recovered to 3.1x in Sep 2021, corrected to 2.3x in Jun 2022. Current 5.2x is mid-cycle. DII buying from 23.7% (Sep 2023) to 31.3% (Dec 2025) is the primary institutional conviction signal. PE at 31.6x on TTM EPS Rs 57 — no 10Y PE history available. OPM trajectory (32% → 42%) supports further margin expansion but P/BV is not at a compressed entry point.

What is proven. India's second-largest credit rating agency completing a four-year turnaround: all subsidiaries now profitable, CATAL turned breakeven after Rs 24-25 Cr cumulative losses, operating leverage rebuilding OPM from 32% (FY22) to 42% (FY26) with international expansion generating top-10 global sovereign coverage.

What is not proven yet. ~89% of revenue is ratings-derived; corporate bond issuances declined 3.2% full-year FY26 and 11.3% in Q4 — bank credit offset at 16.1% is durable only if macro cooperates.

Layer 1 read, 22 August 2026 — KEEP. Every quarter has beaten its own prior year for three years, and the shares got cheaper against that profit. This is India's second-largest credit rating agency, and the numbers behind it are unusually consistent: compare each quarter against the same quarter a year earlier and revenue, profit and margin have ALL improved for twelve quarters running — June 79 then 94 then 112 crore, September 96 then 117 then 136. The reason is simple and structural: about half its costs are salaries that do not change with how many ratings it issues, so when rated debt volume rises the extra fees fall almost straight to profit — which is how the profit margin went from 32% to 42% in four years even though the corporate bond market actually SHRANK 3.2% last year and bank lending did the heavy lifting at 16.1%…

What would change Layer 1’s mind. One observation flips this: bank credit growth falling below 10% year-on-year while the corporate bond market stays negative. The whole thesis is fixed costs absorbing rising rated volume, and this company has already proved the mechanism runs in reverse — revenue was 248 crore in FY21 and 248 crore in FY22, exactly zero growth, when credit markets stalled. A second, sharper trigger: if the SEBI administrative warning of March 2026 escalates to a show-cause notice or a suspension, this is a…

Layer 2 read, 22 August 2026 — BENCH. Good earnings cannot yet outrun two unresolved disclosure misses. Profit has grown faster than revenue, but the external governance protocol says silent target abandonment should cap admission at BENCH. CARE's C067 records the missing revenue-mix reaffirmation and retroactive acquisition condition, while the social fallback is about different industries and cannot rebut that concern.

What would change Layer 2’s mind. Move from BENCH to ADVANCE if the next company update explicitly restates the revenue-mix target, gives unchanged acquisition preconditions, and discloses the SEBI warning's substance without a new governance breach.

The test written in advance. Debt Market Cyclicality — Revenue Concentration in Rating Volumes — Debt Market Cyclicality — Revenue Concentration in Rating Volumes by the next result.

The test written in advance. Management Consistency — 80-20 Target Not Reaffirmed; M&A Readiness Retroactively Conditioned — Management Consistency — 80-20 Target Not Reaffirmed; M&A Readiness Retroactively Conditioned by the next result.

The test written in advance. SEBI Administrative Warning — Regulatory / Compliance Monitorable — SEBI Administrative Warning — Regulatory / Compliance Monitorable SEBI follow-up orders; further regulatory disclosures; issuer mandate shifts to competitors post-warning by the next result.

The dot is where the company is now; the dashed line is the level that would settle the question; a tinted band is where management says it is heading.

Lever 1 · Operating leverage — BUILDING. Fixed-cost structure (~70% fixed) means each incremental rating revenue rupee drops disproportionately to EBITDA; OPM expanded from 32% (FY22) to 42% (FY26) across the recovery cycle. What proves it keeps working: Operating Leverage on Rating Volume Recovery. It stops working if Quarterly corporate bond issuance volume (Prime Database); CARE standalone rating revenue growth rate; bank credit growth trajectory in Q1 FY27 vs FY26 16.1% baseline.

Lever 3 · Management change — BUILDING. CATAL reached profitability in FY26 after Rs 24-25 Cr cumulative losses over four years; 'Others' segment loss narrowed from Rs 728 Lakh (FY25) to Rs 14 Lakh (FY26), enabling management's next phase: scaling. What proves it keeps working: Non-Ratings Turnaround — CATAL Profitability Inflection. It stops working if Quarterly corporate bond issuance volume (Prime Database); CARE standalone rating revenue growth rate; bank credit growth trajectory in Q1 FY27 vs FY26 16.1% baseline.

Lever 5 · Regulatory approval — BUILDING. 45 sovereigns rated in first full-year operations; USD 8.5 billion corporate debt rated; RBI accreditation expanded to non-resident corporates — positioning CARE among top-10 global CRAs by country coverage. What proves it keeps working: International Expansion — CareEdge Global IFSC Franchise Build. It stops working if Quarterly corporate bond issuance volume (Prime Database); CARE standalone rating revenue growth rate; bank credit growth trajectory in Q1 FY27 vs FY26 16.1% baseline.

Sources: our stock research file (31 May 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

CARE Ratings Ltd reported ₹112 Cr of revenue in the Jun 26 quarter, +19.1% year on year. That is the 12th straight quarter of year-on-year growth. Over 10 years it has compounded at 5.4% a year. The last full year, FY26, came in at ₹473 Cr. The last four reported quarters add to ₹491 Cr.

FY26 revenue came in at ₹473 Cr (+17.7% on the year), capping 10 years at 5.4% compound. The latest quarter (Jun 26) printed ₹112 Cr, +19.1% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +17.8% growth against the decade's 5.4% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +17.7% over the last 4 quarters against +19.5%/yr over the last 8 — stabilising; TTM profit +25.0% vs +30.3%/yr — rolling over.

FY26-Q4. revenue ₹131 Cr and profit ₹53 Cr as reported.

FY27-Q1. revenue ₹112 Cr and profit ₹33 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

CARE Ratings Ltd's operating margin is 31.0% in the Jun 26 quarter, +1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 32.0% to 63.0%. The current quarter is running below every full year in that window.

Why this happened. CARE's cost base is predominantly fixed — employee costs constitute approximately 50% of revenues. Rating volume recovery (corporate bond issuances up 66% YoY in Q1 FY26; bank credit at 16.1% growth in FY26) translates disproportionately to EBITDA. Q4 FY26 EBITDA margin: 46.49% vs 43.21% Q4 FY25. Annual OPM trajectory: 32% (FY22) → 34% (FY24) → 39% (FY25) → 42% (FY26). Standalone OPM 48% — highest achieved per management. Verticalized BD approach launched FY24 gained market share in bonds and securitisation without proportionate headcount addition.

The latest quarter's operating margin is 31.0%, +1.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 32.0%–63.0%.

Why the margin moved: operating margin went +1.5 pp year on year while gross margin went +0.0 pp — the gain came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

FY26-Q4. revenue ₹131 Cr and profit ₹53 Cr as reported.

FY27-Q1. revenue ₹112 Cr and profit ₹33 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

CARE Ratings Ltd earned ₹33.0 Cr of net profit in the Jun 26 quarter, +26.9% year on year. It is the 12th consecutive quarter of growth. Full-year FY26 profit was ₹174 Cr. The 10-year compound rate is 3.8%. That is 29.5% of the quarter's revenue. The same quarter a year earlier earned ₹26.0 Cr.

Jun 26 profit was ₹33.0 Cr, +26.9% year on year — the 12th consecutive quarter of growth. On the full year, FY26 printed ₹174 Cr (+24.3%), and the 10-year compound rate is 3.8%.

Why profit moved: revenue contributed +19.1% and the margin +1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +25.9% vs revenue +17.8%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹131 Cr and profit ₹53 Cr as reported.

FY27-Q1. revenue ₹112 Cr and profit ₹33 Cr as reported.

Why-sources: our stock research file (31 May 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 87% of CARE Ratings Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹148 Cr of operating cash against ₹174 Cr of profit. After ₹19.0 Cr of capital spending, ₹129 Cr was left as free cash.

FY26: operating cash of ₹148 Cr against reported profit of ₹174 Cr, leaving free cash of ₹129 Cr after ₹19.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 87% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 87%: the cash cycle held roughly steady between FY21 and FY26 — so conversion tracks profitability rather than the cycle.

Router verdict: no single sink dominates — the next section checks both the working-capital cycle and the capital spending.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

CARE Ratings Ltd's cash conversion cycle runs 27 days in FY26, down from 31 days in FY21. Capital spending ran ₹52.0 Cr over the last 3 years. At FY26 sales of ₹473 Cr each day of that cycle holds about ₹1.3 Cr, so roughly ₹35.0 Cr sits inside the business at any moment.

FY26: debtors at 27 days (an asset-light business — no inventory to speak of) — for a full cycle of 27 days, tighter than FY21's 31.

In money terms: at FY26 sales of ₹473 Cr, each day of the cycle holds about ₹1.3 Cr — so the 27-day loop keeps roughly ₹35.0 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹52.0 Cr over the last 3 fiscal years against ₹36.0 Cr of depreciation — building somewhat ahead of wear-and-tear. Capital work-in-progress stands at ₹5.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: neither the cycle nor the build-out is hoarding the cash — the machine is reasonably clean.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

CARE Ratings Ltd earns a ROCE of 26% in FY26. That is up from a trough of 16% in FY22. Return on invested capital clears the cost of that capital by +28.2 percentage points, so growth here adds value rather than only size. The wiring behind it is 36.8% net margin on 0.43× asset turns.

FY26 ROCE is 26%, recovered from a FY22 trough of 16% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 36.8% net margin × 0.43× asset turns × 1.19× balance-sheet leverage ≈ 18.8% on equity. Margin is doing the heavy lifting; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 40.2% − 12.0% = a +28.2 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

CARE Ratings Ltd carries total debt of ₹26.0 Cr against shareholder equity of ₹943 Cr as of Mar 26, a debt-to-equity of 0.03 — effectively unlevered. On the annual view that ratio went from 0.01 in FY22 to 0.03 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹26.0 Cr against shareholder equity of ₹943 Cr — a debt-to-equity of 0.03. On the annual view, debt-to-equity went from 0.01 (FY22) to 0.03 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions added 5.4 points of CARE Ratings Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 31.6% of the company. Foreign institutions moved +0.0 points over the same window, to 23.4%. The register is read on the four disclosed classes only; nothing is inferred between filings.

Why this happened. CATAL (CareEdge Advisory and Analytics) pivot from loss to profitability is the pivotal milestone management cited in the May 2026 call as enabling the M&A-readiness conversation to begin. Analytics platform (CreditEdge, IntelEdge, Teleto on EdgeRa.ai) reached near-breakeven with client traction expanding from new acquisitions and existing clients adding products. ESG ratings: 58% market share among category-one SEBI providers with 19 new ratings in FY26. Consolidated 'Others' segment loss: Rs 728 Lakh (FY25) → Rs 14 Lakh (FY26). Non-ratings revenue crossed Rs 50 Cr (+19% growth).

The register over the last two years — Domestic institutions: +5.4 points over 8 quarters to 31.6%; Foreign institutions: +0.0 points over 8 quarters to 23.4%.

Why the register moved: domestic institutions drove it (+5.4 points) — steady accumulation by institutions reading the same numbers this page reads.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

CARE Ratings Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

Why this happened. CareEdge Global IFSC rated 45 sovereigns in FY26 (first full year), entering top-10 globally by country coverage. USD 8.5 billion corporate debt across 30+ issuers and 10+ sectors. RBI accreditation expanded to non-resident corporates outside IFSC with risk-weight alignment to global peers. 21 countries where CARE assessments were affirmed by other global rating agencies — methodology validation signal. Africa: South Africa, Tanzania, Kenya licenses acquired in FY26; Mauritius operations generating double-digit growth with 100+ clients; Nepal maintaining leadership. CareEdge Global IFSC still loss-making at nascent stage — profitability timeline not disclosed by management.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

CARE Ratings Ltd trades at 28.0× P/E, mid-range by its own standards (58th percentile). Its long-run median P/E is 25.0×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 28.0× is mid-range by its own standards (58th percentile), against a long-run median of 25.0× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +24.3% against a +2.4% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +17.7%/yr price move, ~+13.8%/yr came from earnings growth and ~+3.9 pp from the multiple (expanding); over 10y, of the +3.2%/yr price move, ~+3.9%/yr came from earnings growth and ~−0.7 pp from the multiple (roughly flat). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 27 August 2026 price, CARE Ratings Ltd was paying for profit growth of about 16.2% a year. Profit itself has compounded 3.8% a year over the past 10 years. Today the market pays 28.0× P/E, the 58th percentile of its own 11-year range.

What the two numbers say together. The multiple is unremarkable against its own past, and the growth the price is paying for is far above what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 27 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Mixed Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

CARE Ratings Ltd reads as mixed on its fundamental arc. Mixed — no clean majority across the growth curves, ROCE holding at 25.9% — the per-curve reads carry the story. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: when the curves disagree, the per-curve reads above matter more than any single verdict.

4-Factor Sector Score

71.8/100 — rank 1 of 3 in Credit Rating Agencies · 97% evidence confidence

CARE Ratings Ltd scores 71.8 out of 100 against the 3 companies it is compared with in Credit Rating Agencies, ranking 1. Confirmed research leader: earnings, capital efficiency and relative strength agree. Move to management, catalyst and risk diligence.

The four contributions add to the total exactly: 27.1 + 20 + 12.1 + 12.6 = 71.8. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Said versus delivered

What CARE Ratings Ltd's management promised, set against what actually arrived — 2 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

80-20 Non-Ratings Revenue Mix - 3-Year Timeline Not Reaffirmed · 14 May 2026. In the May 2025 call, management explicitly committed to transitioning towards an 80-20 ratings-to-non-ratings revenue mix within a 3-year period. One year into that window, the FY26 mix has barely moved from 89.5:10.5 to approximately 89:11, and when directly challenged in the May 2026 call, management offered no reaffirmation of the timeline and no revised commitment, instead providing only a general aspiration to grow both segments.

Inorganic Acquisition Readiness Retroactively Conditioned · 14 May 2026. In the May 2025 call, management stated they were perfectly well positioned to evaluate and execute acquisitions with the Board positively inclined, with no preconditions stated. In the May 2026 call, management disclosed for the first time that CATAL achieving break-even was the internal prerequisite for any acquisition - a condition not communicated to investors in May 2025 when CATAL still carried single-digit losses.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions