Capitaline

Results 10-May-24

Analysis

CARE Ratings

Healthy performance from rating business

CARE Ratings has posted strong 23% increase in the net profit to Rs 23.46 crore in the quarter ended March 2024 (Q4FY2024). Net sales (including other operating income) increased 16% to Rs 90.15 crore. Sales of Ratings & Related Services segment has gone up 10% to Rs 78.69 crore (accounting for 86.9% of total sales). Sales of Others segment surged 83% to Rs 11.85 crore (accounting for 13.1% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has increased 9% to Rs 26.36 crore. PBIT of Ratings & Related Services segment rose 15% to Rs 33.74 crore (accounting for 128.0% of total PBIT). PBIT of Others segment posted loss of Rs 7.38 crore (accounting for -28.0% of total PBIT).

PBIT margin of Ratings & Related Services segment rose from 41.24% to 42.88%.

Operating profit margin has eased from 35.2% to 32.2%, leading to moderate 6% rise in operating profit to Rs 29.03 crore. Other income fell 1% to Rs 10.29 crore. PBIDT increased 4% to Rs 39.32 crore. Provision for interest declined to Rs 0.46 crore. PBDT rose 5% to Rs 38.86 crore. Provision for depreciation fell 13% to Rs 2.67 crore. Profit before tax grew 6% to Rs 36.19 crore.

Provision for tax was expense of Rs 11.64 crore, compared to Rs 13.93 crore. Effective tax rate was 32.2% compared to 40.9%. Minority interest declined 15% to Rs 0.47 crore. Net profit attributable to owners of the company increased 23% to Rs 24.08 crore.

Commenting on the results for Q4 & FY24, Mehul Pandya, Managing Director & Group CEO of CareEdge, said: "The income from operations of our Company rose 14% in FY24 on a Standalone basis as the initial ratings business continued to witness strong growth. The EB/TOA margin remained robust at 45% for FY24. Our other income increased on back of better yield on deposits. Notwithstanding the increase in employee cost for Talent management, our PAT on a Standalone basis improved by 15%, while on a Consolidated basis, it was up by 20% in FY24.

The Consolidated income from operations grew 19%, aided by the increase in the ratings and non-ratings income. The Consolidated EB/TOA margin for FY24 came in strong at 34%. We reiterate that our financial performance should be assessed on an annual basis rather than quarter-on-quarter. Nevertheless, our Company on a Standalone basis recorded a healthy YoY growth of 10% in income from operations for Q4 FY24. The Consolidated income from operations also recorded a YoY growth of 16% for Q4 FY24.

I am happy to share that The Board of Directors has recommended a final dividend of Rs. 11/- per share (of Rs. 10/-face value) which will take the total dividend declared for the year to Rs. 18/- per share.”

Financial Performance (Y2024)

Net sales (including other operating income) of CARE Ratings increased 19% to Rs 331.68 crore. Sales of Ratings & Related Services segment has gone up 14% to Rs 298.38 crore (accounting for 89.8% of total sales). Sales of Others segment has gone up 89% to Rs 33.90 crore (accounting for 10.2% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 14% to Rs 101.65 crore. PBIT of Ratings & Related Services segment rose 15% to Rs 125.95 crore (accounting for 123.9% of total PBIT). PBIT of Others segment witnessed loss of Rs 24.30 crore (accounting for -23.9% of total PBIT).

PBIT margin of Ratings & Related Services segment rose from 42.07% to 42.21%.

Operating profit margin has declined from 35.7% to 33.8%, leading to 7% rise in operating profit to Rs 112.13 crore. Other income rose 23% to Rs 46.69 crore. PBIDT rose 11% to Rs 158.82 crore. Provision for interest rose 71% to Rs 1.71 crore. PBDT rose 11% to Rs 157.11 crore. Provision for depreciation eased to Rs 10.48 crore.

Profit before tax grew 17% to Rs 146.63 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 44.07 crore, compared to Rs 40.29 crore. Effective tax rate was 30.1% compared to 32.0%.

Minority interest increased 6% to Rs 2.04 crore. Net profit attributable to owners of the company increased 20% to Rs 100.52 crore.

Care Ratings: Consolidated Results
	2403 (3)	2303 (3)	Var %	2303 (12)	2303 (12)	Var %
Sales	90.15	77.51	16	331.68	278.99	19
OPM %	32.2	35.2		33.8	35.7
OP	29.03	27.32	6	112.13	105.05	7
Other Income	10.29	10.37	-1	46.69	37.94	23
PBDIT	39.32	37.68	4	158.82	142.99	11
Interest	0.46	0.54	-15	1.71	1.00	71
PBDT	38.86	37.15	5	157.11	141.99	11
Depreciation	2.67	3.06	-13	10.48	10.53	0
PBT	36.19	34.09	6	146.63	131.46	12
EO	0.00	0.00	-	0.00	-5.71	-
PBT after EO	36.19	34.09	6	146.63	125.75	17
Tax	11.64	13.93	-16	44.07	40.29	9
PAT	24.55	20.15	22	102.56	85.46	20
Minority interest	0.47	0.55	-15	2.04	1.93	6
Profit/Loss of Associate Company	0.00	0.00	-	0.00	0.00	-
PAT	24.08	19.60	23	100.52	83.53	20
EPS (Rs)*	32.3	26.3		33.7	28.0
*EPS is annualized on latest equity of Rs 29.8521 crore, face value of Rs 10 each, Source: Capitaline Corporate Database

Care Ratings: Consolidated Segment Results
	% of total	2403 (3)	2303 (3)	Var. (%)	% of total	2403 (12)	2303 (12)	Var. (%)
Segment Revenue
Rating,Research and other Service	86.9	78.69	71.45	10	89.8	298.38	261.49	14
Consulting Services	13.1	11.85	6.47	83	10.2	33.90	17.91	89
Total Reported Sales	100.0	90.54	77.91	16	100.0	332.28	279.40	19
Less: Inter segment revenues		0.40	0.40			0.59	0.41
Net Sales	100.00	90.15	77.51	16	100.00	331.68	278.99	19
PBIT
Rating,Research and other Service	128.0	33.74	29.47	15	123.9	125.95	110.00	15
Consulting Services	-28.0	-7.38	-5.21	42	-23.9	-24.30	-21.19	15
Total PBIT	100.0	26.36	24.26	9	100.0	101.65	88.81	14
Less : Interest		0.46	0.54	-15		1.71	1.00	71
Add: Other un-allcoable		10.29	10.37	-1		46.69	37.94	23
Profit Before Tax		36.19	34.09	6		146.63	125.75	17
Figures in Rs crore, PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

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