CARE Ratings announces impressive Q2 FY25 results—Investors cheer interim dividend

CARE Ratings Limited, one of India’s premier credit rating agencies, has reported robust financial results for the quarter and half-year ending 30th September 2024. The company, which operates under the ticker codes NSE: CARE and BSE: 534804, revealed a 22% year-on-year increase in consolidated revenue from operations for Q2 FY25, reaching Rs. 117.37 crore. This performance underscores the company’s growing dominance in the ratings and non-ratings business segments.

CARE Ratings Financial Highlights for Q2 and H1 FY25

For the second quarter of FY25, CARE Ratings recorded a consolidated EBITDA of Rs. 55.72 crore, a 33% year-on-year growth, with an EBITDA margin of 47%. The profit after tax (PAT) also saw a surge, growing by 31% to Rs. 46.88 crore. The company’s revenue and profit margins are indicative of its strategic focus on both ratings and non-ratings segments.

In its standalone results, the revenue from operations for H1 FY25 increased by 18% year-on-year, reaching Rs. 166.85 crore. The company’s operating profit margins remained healthy at 47%, reflecting its efficient cost management and operational strategies.

Dividend Announcement and Segment Performance Breakdown

The Board of Directors has approved an interim dividend of Rs. 7 per share, maintaining investor confidence and ensuring consistent shareholder returns. The announcement is aligned with the company’s strategy to balance growth and profitability, while also rewarding shareholders.

The ratings business, which remains the core of CARE Ratings’ operations, reported a 19% year-on-year growth for H1 FY25, contributing Rs. 177.63 crore. The non-ratings segment showed even stronger growth, climbing 37% to Rs. 18.66 crore, reflecting the company’s diversified approach and expansion in analytics, consulting, and sustainability services.

Expert Insights on CARE Ratings’ Growth Trajectory

According to Mehul Pandya, Managing Director and Group CEO of CARE Ratings, the company’s strong performance reflects its commitment to quality and diversification. He emphasized the success of their ratings business in the capital market, specifically in the securitization and bank debt sectors. He also noted that the contribution from non-ratings business has increased to 9.5% of total consolidated revenue, signaling a shift towards a more balanced portfolio.

CARE Ratings has also made a significant international push. The launch of CareEdge Global IFSC Ltd. has positioned it as the first Indian agency to offer sovereign and global scale ratings. This expansion is further supported by regulatory approvals for its subsidiaries in South Africa and Nepal, strengthening its global footprint.

Market Sentiment and Future Outlook

CARE Ratings’ stock performance remains optimistic as investors respond positively to the Q2 FY25 results and the interim dividend declaration. The company’s efforts in diversifying its business model through subsidiaries like CARE ESG Ratings Ltd. and CareEdge Global IFSC Ltd. highlight its forward-thinking approach in sustainability and international markets. Analysts predict that with a favorable monsoon and improvements in domestic consumption and investment, the GDP growth is expected to remain healthy at 7% for FY25.