We're all set for a new experience. To visit the old Ventura website, click here.
Ventura Wealth Clients

CARE ratings jumps 13%, reaches 6-year high on strong Q2

Stocks
2 min Read Oct 25, 2024
Share

In a notable rally, shares of CARE Ratings hit a six-year high, reaching ₹1,332.30, after a 13% rise on the BSE. This surge is attributed to the company's impressive Q2FY25 financial results, which have drawn considerable attention from investors. This development highlights the potential of share market investment for those seeking growth.

Q2FY25 financial performance boosts investor confidence

CARE Ratings reported a consolidated profit after tax (PAT) of ₹46.88 crore for Q2FY25, marking a 31% year-on-year (YoY) increase from ₹35.73 crore in Q2FY24. Additionally, the company's PAT doubled from the previous quarter's ₹21.38 crore.The stock is now trading at its strongest level since September 2018. It has outperformed the BSE Sensex, which fell 5% in October 2024, while CARE Ratings surged 32%.

Revenue and profitability jump amid strong market demand

CARE Ratings' revenue from operations increased 22% year over year, reaching ₹117.37 crore in Q2FY25. EBITDA-earnings before interest, taxes, depreciation, and amortisation rose by 33% to ₹55.72 crore, with a margin of 47%. The company attributed this growth to strong performance in both its ratings and non-ratings business, reflecting solid demand for capital market instruments and securitisation.

Corporate bond and commercial paper issuances rise post-election

The post-election period in Q2FY25 saw a significant uptick in fundraising activities. Corporate bond issuances, including public issues and private placements, surged by 68% YoY to ₹3.11 trillion. Commercial paper issuances also increased by 14%, totalling ₹3.74 trillion for the quarter. These factors highlight the growing potential for share market investment, driven by a favourable business environment.

Healthy bank credit growth despite NBFC slowdown

Bank credit offtake remained strong, growing by 15% YoY as of August FY25. However, credit growth to the non-banking financial company (NBFC) segment slowed to 11.9%, down from 21.3% the previous year. Personal loans also experienced slower growth at 16.9%. Industrial credit, on the other hand, rose significantly to 9.8% YoY as of August 2024.

Key takeaways

  1. CARE Ratings shares hit a six-year high, reflecting strong share market investment interest.

  2. Consolidated PAT increased by 31% YoY in Q2FY25, reaching ₹46.88 crore.

  3. Corporate bond issuances grew by 68%, totalling ₹3.11 trillion in Q2FY25.

  4. Bank credit offtake increased by 15%, with industrial credit seeing strong growth.

This surge in CARE Ratings’ performance, driven by robust financial results and a favourable economic environment, underscores the growing importance of share market investment in India.