CARE Ratings Ltd Q1 FY25 – FY25: Sales +19%, PAT +24%, ROE 18% – The Auditor Who Audits Everyone, Except Its Own Past
1. At a Glance
CARE Ratings (or CareEdge, because rebranding makes sins disappear) is sitting at a market cap of ₹4,594 crore with a stock price of ₹1,530. In the last one year, the stock delivered +47.8% return while flaunting an ROE of 18% and ROCE of 24.6%. Their quarterly sales for Q1 FY25 grew 19% YoY to ₹94 crore, and profits popped 24% YoY to ₹25.8 crore. Basically, they’re the report card printers of Indian capitalism, but sometimes the teachers themselves get caught copying.
2. Introduction
Imagine a company whose sole job is to tell banks, NBFCs, and corporates whether they can be trusted with money. Now imagine that same company getting fined ₹1 crore by SEBI for screwing up ratings of IL&FS debentures. That, ladies and gentlemen, is the glorious irony called CARE Ratings.
Founded in 1993, CARE has been the king of PSU ratings and infra loans, but it has also seen more CEO exits than a daily soap serial. In the last five years: Mokashi resigned, Arun Kumar resigned, Mahajan resigned, and finally, Mehul Pandya took charge. If MD chairs had loyalty points, CARE would’ve redeemed them by now.
Despite the drama, the business model is money-printing simple: issue ratings, collect fees, and repeat. High margins (38.6% OPM) and low capital intensity make it a cash cow — or should we say, a cash auditor.
3. Business Model – WTF Do They Even Do?
CARE Ratings = the moral science teacher of Indian finance. They:
Rate companies and PSUs so banks know whether to lend.
Surveil ratings annually (aka keep billing the same client every year).
Advisory & Research: write reports so heavy you could use them as paperweights.
Risk Solutions: they’ve got an IT arm offering compliance dashboards.
Global Presence: they’ve somehow convinced Nepal, Mauritius, and Africa to pay for their stamp of approval.
Revenue mix says it all: 94% from rating income, 3% from consultancy, 3% from license fees. So, all that “ESG platform SIRIUS” and AI buzzwords? Still pocket change.
