How has been the historical performance of CARE Ratings?

Revenue Growth and Operating Performance

CARE Ratings’ net sales have exhibited a consistent upward trend since fiscal 2020, rising from ₹243.64 crores to ₹402.32 crores in fiscal 2025. This represents a compound growth trajectory, with a notable acceleration in the last two years. The total operating income mirrors this pattern, reflecting the company’s ability to expand its core business activities effectively. Despite a dip in fiscal 2019, the subsequent years have seen a recovery and sustained growth, underscoring the firm’s operational resilience.

Operating profit before depreciation and interest (PBDIT) excluding other income has also improved significantly, reaching ₹155.34 crores in fiscal 2025 from ₹81.32 crores in fiscal 2020. When factoring in other income, operating profit surged to ₹206.09 crores in the latest fiscal year, highlighting the company’s diversified income streams and efficient cost management.

Profitability and Margins

The company’s profitability margins have remained healthy throughout the period under review. Operating profit margins, excluding other income, have fluctuated between 32.15% and 38.61%, with the latest fiscal year reflecting a strong margin of 38.61%. Gross profit margins have also been robust, standing at 50.7% in fiscal 2025, indicating effective control over operating expenses relative to revenue.

Profit after tax (PAT) margins have consistently hovered around the 30% mark, with a peak of 36.62% in fiscal 2021. The PAT margin for fiscal 2025 stands at 34.8%, reflecting sustained profitability despite market fluctuations. Earnings per share (EPS) have followed a similar upward trend, increasing from ₹27.96 in fiscal 2020 to ₹45.85 in fiscal 2025, signalling enhanced shareholder value over time.

Balance Sheet Strength and Asset Quality

CARE Ratings maintains a solid balance sheet with shareholder’s funds growing steadily from ₹533.26 crores in fiscal 2020 to ₹806.27 crores in fiscal 2025. The company has no long-term or short-term borrowings, underscoring a debt-free status that enhances financial stability and reduces risk exposure. Total liabilities have increased in line with asset growth but remain well-managed relative to equity.

On the asset side, net block values have risen moderately, reflecting ongoing investments in fixed assets. Non-current investments have seen fluctuations but remain a significant component of total assets. Current assets have expanded substantially, driven by increases in short-term loans and advances as well as cash and bank balances, which stood at ₹97 crores in fiscal 2025. This liquidity position supports operational flexibility and growth initiatives.

Cash Flow and Financial Discipline

Cash flow from operating activities has shown a positive trajectory, increasing from ₹67 crores in fiscal 2020 to ₹90 crores in fiscal 2024, indicating strong cash generation capabilities. Despite some volatility in investing and financing activities, the company has maintained a stable net cash position, with closing cash and cash equivalents rising to ₹97 crores in fiscal 2025. This reflects prudent financial management and the ability to fund operations and investments internally.

Overall, CARE Ratings’ historical performance reveals a company with consistent revenue growth, strong profitability, a robust balance sheet free of debt, and healthy cash flows. These factors collectively position the firm well for sustained future growth and resilience in the competitive capital markets sector.

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