CARE Ratings Limited, India's second-largest credit rating agency, has outlined an ambitious growth strategy while reporting strong financial results for the first quarter. The company's management has announced plans to expand across key business areas and geographical regions to enhance its competitiveness in the evolving financial landscape.

Robust Financial Performance

For Q1, CARE Ratings reported impressive financial results:

The company's consolidated revenue from operations grew by 19% year-on-year, reaching ₹93.91 crore. This growth was primarily driven by a healthy uptick in the ratings business across various segments.

Strategic Growth Initiatives

Mehul Pandya, Managing Director & Group CEO of CareEdge, commented on the results and future outlook: "Q1 commenced on a positive note despite the challenging global macroeconomic environment. Looking ahead, we remain committed to continuously deepening our core capabilities, expanding our geographic reach, and sharpening our competitive edge - to ensure we continue to make positive impact across all the markets we serve."

The company's growth strategy focuses on:

1. Expanding key business areas
2. Geographical expansion
3. Enhancing competitiveness

Market Conditions and Fundraising Activities

CARE Ratings' growth strategy is supported by positive trends in the market:

• Strong fundraising activities in the economy
• Healthy bond and commercial paper issuances
• Positive economic indicators

Corporate bond issuances rose by 66% year-on-year to ₹3.40 lakh crore in Q1, while commercial paper issuances increased by 19% to ₹4.50 lakh crore.

Segment Performance

The ratings business, which forms the core of CARE Ratings' operations, showed strong growth:

• Ratings and related services revenue: ₹82.98 crore (18% YoY growth)
• Non-ratings business revenue: ₹11.00 crore (30% YoY growth)

The non-ratings segment, including analytics, research, and advisory services, contributed 12% to the consolidated revenue.

Outlook

Despite some moderation in overall bank credit offtake, CARE Ratings remains optimistic about the domestic economy's resilience. The company expects to capitalize on opportunities arising from:

• Government's continued focus on infrastructure development
• Easing inflation
• Potential RBI rate cuts
• Favorable monsoon prospects

However, the company acknowledges that global economic uncertainties pose challenges for a significant revival in private capital expenditure.

About CARE Ratings

Established in 1993, CARE Ratings Limited (CareEdge) is a knowledge-based analytical group offering services in Credit Ratings, Analytics, Consulting, and Sustainability. The company has a credible track record of rating companies across diverse sectors and maintains a strong position in various segments of the financial services industry.

CARE Ratings Limited, India's second-largest credit rating agency, has reported a robust performance for the first quarter, with a significant increase in profit and revenue. The company also announced the reappointment of two independent directors, reinforcing its corporate governance structure.

Strong Financial Performance

For the quarter ended June 30, CARE Ratings reported a consolidated net profit of ₹2,649.74 lakhs, marking a substantial 24% year-on-year growth from ₹2,138.29 lakhs in the same quarter last year. This impressive growth in profitability underscores the company's strong market position and operational efficiency.

The company's consolidated revenue from operations also saw a notable increase, rising to ₹9,390.50 lakhs from ₹7,892.00 lakhs in the previous year's corresponding quarter, representing a 19% growth. This growth in revenue indicates a healthy demand for CARE Ratings' services and its ability to capitalize on market opportunities.

On a standalone basis, CARE Ratings performed equally well, with a net profit of ₹2,911.55 lakhs, up from ₹2,401.16 lakhs in the same quarter last year.

Segment-wise Performance

The company's financial results reveal a strong performance across its business segments:

The ratings business, which forms the core of CARE Ratings' operations, demonstrated solid growth. Meanwhile, the 'Others' segment, which includes non-ratings businesses, showed an impressive 30% year-on-year growth, indicating successful diversification efforts.

Corporate Governance and Leadership

In a move to strengthen its board, CARE Ratings announced the reappointment of two independent directors:

1. Mr. G. Mahalingam: Reappointed for a three-year term effective November 21.
2. Mr. V. Chandrasekaran: Reappointed for a three-year term effective December 7.

Both reappointments are subject to shareholder approval, reflecting the company's commitment to maintaining strong corporate governance practices.

Employee Stock Options and Share Capital

During the quarter, CARE Ratings granted 7,500 stock options to employees under its Employee Stock Option Scheme (ESOS) 2020. Additionally, the company allotted 25,933 equity shares pursuant to the exercise of employee stock options, slightly increasing its paid-up share capital.

Management Commentary

Mehul Pandya, Managing Director & Group CEO of CareEdge, commented on the results: "The quarter commenced on a positive note despite the challenging global macroeconomic environment. Our performance has been primarily driven by a healthy uptick in ratings business across the segments. Our non-ratings businesses continued their momentum of providing a good contribution in the consolidated performance."

The company remains focused on deepening its core capabilities, expanding geographic reach, and sharpening its competitive edge to continue making a positive impact across all markets it serves.

With its strong financial performance, strategic reappointments, and continued focus on growth and diversification, CARE Ratings appears well-positioned to maintain its market leadership in the credit rating industry while exploring new avenues for expansion.