Please refer to important disclosures at the end of this report
1
Credit Analysis and Research Limited (CARE) is a credit rating agency. CARE is
engaged in providing financial services other than securities dealing activities.
CARE is the second largest rating company by market share with a pure play in
the rating business with 99% of its FY16 core revenue generated from this
segment. In H1FY17 CARE’s rating revenue has also increased at faster pace at
9% against CRISIL’s rating revenue at 6%. CARE emerged as a strong player in
the rating business with strong margins. CARE’s business is best-in-class with the
strong EBITDA Margins of 60%+ & PAT Margin of 45%+. Considering the
economic recovery and improvement in credit growth, CARE is continuousl
y
gaining market share in rating business. Going forward, the Bank credit rating
and bond market segments will drive overall rating revenue growth. The business
structure is asset light with not much of CAPEX while it generates strong operating
cash flow. The company is virtually debt free and has been maintaining a health
y
dividend payout of 101.34% (Div. Yield: 2.02%). The company has reported a
healthy Return on Equity (RoE) of 25%+ for the last 5 years. Hence Buy.
BUY
CMP `1,371
Stock Info
Sector
Beta 0.6
Bloomberg Code
Shareholding Pattern (%)
Promoters 0.0
MF / Banks / Indian Fls 54.8
FII / NRIs / OCBs 33.3
Indian Public / Others 12.0
Abs. (%) 3m 1yr 3yr
Sensex (7.6) 0.3 25.5
CARE 14.8 3.8 100.2
Reuters Code CREI.BO
10
BSE Sensex 25,860
Nifty 7,966
Face Value (
`
)
Credit Rating
Market Cap (
`
cr) 4,305
52 Week High / Low 1573/885
Avg. Daily Volume 11,328
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Credit Analysis & Research
Others | Credit Rating
November 25, 2016
Credit Analysis & Research| Credit Rating
November 25, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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offering of securities of the company covered by Analyst during the past twelve months.
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Disclosure of Interest Statement Credit Analysis & Research
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15