CARE Ratings Limited

Financial Services — Financial Data & Stock Exchanges · NSE

₹1,610.00+₹44.00 (+2.81%)

DalalBaazaar Score

79 / 100

🟢 Good

Verdict

ATTRACTIVE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of CARE Ratings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

CARE Ratings Limited, a credit rating agency, provides various rating and related services in India and internationally.

IndustryFinancial Data & Stock Exchanges

SectorFinancial Services

Employees608

Annual revenue₹473 Cr

How does it make money?

Turns over ₹473 Cr a year. Of every ₹100 of sales, about ₹36 reaches shareholders as profit, with ₹53 left at the operating level before interest, tax and depreciation. Each of its 608 employees supports ₹77.8 lakh of revenue a year, the signature of a people-led business.

EBITDA margin52.7%

Net margin36.2%

Revenue / employee₹77.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, HDFC BANK LTD, ICICI BANK LTD., STATE BANK OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

ROCE24.1%

ROE18.4%

Peer median ROE16.5%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 15.0% and earnings to grow about 15.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+15.0%

Est. earnings growth+15.9%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +70% while net margin moved +21% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+70%

Margin effect+21%

DalalBaazaar Score

79/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.35 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

88/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

53/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

27.3x

3Y Median

35.2x

40 monthly readings · mean 36.1x · range 28.2x–53.3x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 22% below its 3y median of 35.2x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 61% above the peer median of 17.0x.

vs. its own history

Cheap

35.2x median over 40 months · -22%

vs. sector peers

Expensive

17.0x median of 4 peers · +61%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

27.3x

P/B

5.19x

EV/EBITDA

19.4x

PEG

1.01

Dividend Yield

1.37%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 51.1% to 52.7% over 3 years.
Return on equity is rising
ROE has improved from 12.4% to 18.4%.
Return on capital is rising
ROCE has improved from 17.8% to 24.1%.
Valuation below its historical average
At 27.3x the stock trades 22% below its own median of 35.2x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 51.1% to 52.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 22% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 61% above the peer median. That premium needs a reason that persists, or it closes.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 14% a year✓ 19.2% CAGR
Latest reported year was 18.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 51%✓ 52.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 16%✓ 18.4%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Valuation vs its own median of 35.2x✓ 27.3x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹4,851 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.3x

Fair

Fairly valued against the generic band

P/B Ratio

5.19x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹58.93

Profitable

Profitable on a per-share basis

ROE

18.4%

Strong

Strong capital efficiency

ROCE

24.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.78x

High

High leverage

Revenue Growth (YoY)

18.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

25.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.37%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹139 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹1,610

P/E (Forward)

20.7x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

27.6%

Good

Healthy core-business profitability

Net Margin

36.2%

Good

Strong bottom-line conversion

Current Ratio

5.76

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.35

Defensive

Steadier than the market

52W Range Position

49%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1599.3 / 1655.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

46.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹279 Cr	₹332 Cr	₹402 Cr	₹473 Cr	+19.2%
EBITDA	₹142 Cr	₹157 Cr	₹202 Cr	₹249 Cr	+20.5%
EBITDA Margin	51.1%	47.4%	50.3%	52.7%	—
PAT (Net Profit)	₹84 Cr	₹101 Cr	₹137 Cr	₹171 Cr	+27.0%
EPS	₹28.17	₹33.67	₹45.69	₹56.83	+26.4%
ROE	12.4%	14.0%	17.0%	18.4%	—
ROCE	17.8%	19.4%	22.6%	24.1%	—
Total Debt	₹17 Cr	₹20 Cr	₹24 Cr	₹26 Cr	+14.4%
Free Cash Flow	₹71 Cr	₹82 Cr	₹108 Cr	₹139 Cr	+25.3%

🟢 Revenue has grown at 19.2% a year over 3 years.

🟢 EBITDA has grown at 20.5% a year over 3 years.

🟢 EBITDA Margin has risen from 51.1% to 52.7% over 3 years (+1.6 pts).

🟢 PAT (Net Profit) has grown at 27.0% a year over 3 years.

🟢 EPS has grown at 26.4% a year over 3 years.

🟢 ROE has risen from 12.4% to 18.4% over 3 years (+5.9 pts).

🟢 ROCE has risen from 17.8% to 24.1% over 3 years (+6.3 pts).

🔴 Total Debt has grown at 14.4% a year over 3 years.

🟢 Free Cash Flow has grown at 25.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,105 Cr

Total Liabilities

₹162 Cr

Total Debt

₹26 Cr

Cash & Equivalents

₹43 Cr

Operating Cash Flow

₹148 Cr

Capex

-₹8 Cr

Shareholding (proxy)

Institutional Holding

36.0%

Insider Holding

15.8%

Corporate Actions

Dividend Rate

₹22

Ex-Dividend Date

25 Jun 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹2,201

+36.7% vs CMP

Target Range

₹2,201 – ₹2,201

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%
STATE BANK OF INDIA	10.3x	15.2%

Recent News

3 positive1 mixed2 general

CARE Ratings Limited (NSE:CARERATING) Looks Interesting, And It's About To Pay A Dividend

Simply Wall Street, 21 JunCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Why Is CARE Ratings Share Price Falling Key Reasons 2026

Univest, 03 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Adani Enterprises gets rating upgrade from CARE Ratings to AA; Stable; shares up 21% in 2026

The Economic Times, 07 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

CARE Ratings vs ICRA: Similar business, different bets

Value Research, 19 Aug

Indian Hotels, Oriental Hotels rally up to 6%; what's driving hotel stocks?

Business Standard, 16 Oct

Adani Enterprises shares fall 4% despite getting CARE Ratings upgrade to AA; stable

The Economic Times, 08 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong17.5/20

🟢Financial HealthStrong17/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong12.6/15

🟡ValuationFair7.9/15

🟡RiskModerate5.2/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

This thesis breaks if

✓Revenue growth stays above 14% a year19.2% CAGR
✓EBITDA margin holds above 51%52.7%
✓Return on equity stays above 16%18.4%
✓Valuation vs its own median of 35.2x27.3x today