CARE would be conducting surveillance for more than 5,000 companies, which will certainly its topline in good order, says MD & CEO DR Dogra.
DR Dogra, MD & CEO, CARE told CNBC-TV18 that the company hopes to deliver better numbers in the next three quarters. In the first quarter of FY14, the rating agency reported weak earnings.
“Our performance has to be looked in view of the general economy scenario. CARE would be conducting surveillance this time for more than 5,000 companies and that will certainly keep our topline in good order,” he adds.
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Below is the verbatim transcript of DR Dogra's interview on CNBC-TV18
Q: This quarter has been quite strong with 26 percent revenue growth, 45 percent net profit growth. Do you think you can sustain this performance for the full year?
A: Q1 has been a very lean quarter for the rating industry because we get annual reports after audit only June-August onwards. So Q1 has always been a very low quarter. But this time we have been able to complete some of the surveillances and if you look at debt volumes, they are substantially higher. That is why we have done 20 percent growth on the operating side and 40 percent growth on the total income because the other income has gone up because of the fixed maturity plan investment that matured during the quarter.
Next three quarters are always better than Q1 and we hope we will be able to deliver right numbers. Our performance has to be looked in view of the general economy scenario. We keep on doing surveillances for the accounts that we rate in last years. So cumulatively the CARE would be conducting surveillance this time for more than 5,000 companies and that will certainly keep our topline in good order.
Q: You said this quarter’s results have also been boosted because of higher other income supported by your fixed maturity plans (FMPs) that have matured, will that recur in Q2 and Q3 as well?
A: No, most of the FMPs are annual and they mature only after completion of one year. So you don’t have much fixed maturity plan income but certainly we have investment of around more than Rs 400 crore. There will be some income from the other investments that we have on our books during the balance nine months period.
Q: How much have the debt volumes gone up, how many clients CARE has added in this quarter and going ahead as well what the ballpark guidance could look like?
A: As far as the debt volumes are concerned, total assignments have increased by around 9 percent from 1,361 rating assignments done in Q1 of FY13 to 1,484 assignments done in this quarter this time.
As far as bank facilities are concerned, we did Rs 1,203 bank loan rating against only 1,081 ratings during last quarter, which was a major part of the income we had.
With regards to volume of debt rated, we had debt volumes of Rs 56,765 crore in Q1FY13, which increased to Rs 76,429 crore in Q1FY1.
Bank facilities grew from Rs 56,000 crore to around Rs 82,000 crore and debenture debt volumes increased from Rs 76,000 crore to Rs 139,000 crore.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.