Centrum's research report on CARE Ratings
Regulatory framework remains encouraging and bodes well for credit rating agencies (CRA). With its improving market share, we expect CARE to benefit from the revival in rating opportunities. The agency’s strong business model, free cash flow yield and healthy returns profile remain key positives. Valuations at 19.9x FY19E EPS remain attractive. BUY.
Outlook
We upgrade CARE Ratings (CARE) to Buy with TP at Rs 1,600 (valued at 23x FY19E EPS). The credit rating agency’s Q3’17 PAT beat estimates led by strong FMP gains, however, its revenue was a tad lower than we had estimated. We draw comfort from CARE’s strong traction in the SME business and healthy volume growth (+28.1% yoy for 9MFY17).
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