Care Ratings (CARERATING) | News Based Sentiment Analysis

• On September 12, 2025, Care Ratings announced its Q1 FY26 financial results, showcasing a strong start to the fiscal year with operating income rising 19% year-on-year to Rs 93.9 crore. This growth was supported by a 28% increase in EBITDA to Rs 27.8 crore and a 24% jump in net profit to Rs 26.5 crore, demonstrating improved profitability.
• Care Ratings is demonstrating sector-leading growth in its core ratings business, achieving a 16% increase in domestic rating revenue in Q1 FY26 – matching CRISIL and surpassing ICRA’s 14% growth (as of September 11, 2025). Over the FY22-25 period, the company’s domestic rating revenue has grown at a Compound Annual Growth Rate (CAGR) of 16%.
• The company is strategically diversifying its revenue streams, with non-ratings revenue (primarily from Analytics and Advisory) increasing its share from 6% in FY23 to 11% in FY25 (reported September 11, 2025). This expansion includes onboarding over 200 new clients in the 'A' and above categories in FY25.
• Care Ratings allotted 4,400 equity shares under its Employee Stock Option Scheme (ESOS) on September 10, 2025, impacting the company’s paid-up share capital.
• Despite a minor default in the 'BBB' rating category due to an operational issue involving incorrect bank details (affecting Rs 71,280 for one debenture holder out of 1,626 on an unspecified date in fiscal year 2025), the company continues to demonstrate strong performance.
• Investor sentiment remains positive, with Yes Securities reiterating a 'Buy' rating on September 12, 2025, based on a reasonable valuation of 24x FY27 Price-to-Earnings (P/E). The stock price was Rs 1,624.10 on September 16, 2025, with a 60.14% return over the past year, outperforming the BSE500 index.
• Technical analysis on September 11, 2025, indicated increasing buying momentum, with the MACD line moving upwards and the Commodity Channel Index (CCI) generating a strong short-term buy signal. The stock was trading above the Volume Weighted Average Price (VWAP) of Rs 1,595.51, a positive sign.

The Investment Story: Care Ratings delivered a strong start to FY26 with robust Q1 results and continued growth in both its core ratings business and diversifying non-ratings segments. The company is strategically expanding its offerings and maintaining positive investor sentiment.

What It Means for Investors: The strong financial performance, coupled with a 'Buy' rating from Yes Securities and positive technical indicators, suggests continued upside potential for Care Ratings. While the minor default is a point to monitor, the overall trajectory remains positive.

Looking Ahead: Investors should monitor the company’s progress against its projected revenue, EBITDA, and PAT CAGR estimates of 17%, 22%, and 20% respectively over FY25-27, as well as the continued expansion of its non-ratings business.

The Bottom Line: Care Ratings is a compelling investment opportunity demonstrating strong financial health, strategic diversification, and positive market sentiment. The company appears well-positioned for continued growth and value creation.