CARE Ratings Ltd is Rated Buy by MarketsMOJO

Current Rating and Its Significance

On 24 December 2025, MarketsMOJO revised CARE Ratings Ltd’s rating from 'Hold' to 'Buy', reflecting an improved assessment of the company’s prospects. The Mojo Score increased by 7 points, moving from 64 to 71, signalling stronger confidence in the stock’s potential. This 'Buy' rating indicates that the stock is expected to deliver favourable returns relative to its peers, supported by solid fundamentals, positive financial trends, and encouraging technical signals.

Here’s How CARE Ratings Ltd Looks Today

As of 05 January 2026, CARE Ratings Ltd continues to demonstrate robust performance across multiple parameters. The company operates within the Capital Markets sector and is classified as a small-cap stock. Despite its size, it has shown resilience and growth potential, making it an attractive proposition for investors seeking exposure to this segment.

Quality Assessment

The company’s quality grade is rated as good. CARE Ratings Ltd maintains a low debt-to-equity ratio, averaging zero, which indicates a conservative capital structure and limited reliance on external borrowings. This financial prudence reduces risk and enhances stability. Furthermore, the company has reported positive results for nine consecutive quarters, underscoring consistent operational performance. Key metrics such as Return on Capital Employed (ROCE) stand at a healthy 24.14% for the half-year period, reflecting efficient utilisation of capital to generate profits.

Valuation Considerations

While the valuation grade is marked as very expensive, this reflects the premium investors are currently willing to pay for CARE Ratings Ltd’s shares, given its strong fundamentals and growth prospects. The stock’s market capitalisation remains in the small-cap category, but its price-to-earnings and other valuation multiples suggest a higher price relative to earnings compared to the broader market. Investors should weigh this premium against the company’s growth trajectory and sector outlook when considering entry points.

Financial Trend and Momentum

The financial grade is positive, supported by strong quarterly sales and cash flow figures. The latest quarterly net sales reached ₹136.37 crores, the highest recorded, while cash and cash equivalents stood at ₹286.60 crores, signalling healthy liquidity. Institutional investors hold a significant 55.21% stake in the company, with their holdings increasing by 0.83% over the previous quarter. This institutional confidence often reflects thorough fundamental analysis and can be a positive indicator for retail investors. Additionally, the stock has delivered consistent returns over the past three years, outperforming the BSE500 index annually, with a notable 24.67% return in the last year alone.

Technical Outlook

The technical grade for CARE Ratings Ltd is bullish, reflecting positive price momentum and favourable chart patterns. The stock has gained 2.58% in the last trading day and has shown strong performance over multiple time frames: 7.81% in the past week, 12.05% in the last month, and 13.91% over three months. Although the six-month return is negative at -9.95%, the year-to-date gain of 8.07% and one-year return of 24.67% highlight a strong recovery and upward trend. These technical signals suggest that the stock is currently in an upward trajectory, which may attract momentum investors looking for growth opportunities.

Investment Implications

For investors, the 'Buy' rating on CARE Ratings Ltd implies a recommendation to consider accumulating shares, given the company’s solid fundamentals, positive financial trends, and bullish technical outlook. The premium valuation indicates that the market has priced in growth expectations, so investors should monitor entry points carefully. The strong institutional interest and consistent quarterly performance provide additional confidence in the stock’s prospects.

Summary

CARE Ratings Ltd’s current 'Buy' rating by MarketsMOJO, updated on 24 December 2025, is supported by a combination of strong quality metrics, positive financial trends, and a bullish technical outlook as of 05 January 2026. While the stock trades at a premium valuation, its consistent quarterly growth, low leverage, and institutional backing make it a compelling option for investors seeking exposure to the capital markets sector. The stock’s recent performance and outlook suggest it remains well-positioned to deliver value over the medium term.

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