ValuePickr Forum

CARE Ratings Limited

(AmitContrarian) #246

None of them trading at significant discount to their 10 year average PE …

(Karthik) #247

Whats your source for 10 Year average PE?

(Shailesh) #248

Value Research


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(AKGupta) #249

Anybody saw the results?

How has rating revenue for FY19 gone down by 7.5% to ₹297 crores even when volume of debt rated has gone up by 20% from ₹16.5 lac crores to ₹20 lac crores? :face_with_monocle:

(Arun S G) #250

Here’s a couple of points:

  1. Buyer power has decreased. It appears that at least a section of buyers of CARE’s services has diminished financial capabilities, namely NBFCs. The report from CARE has a mention.
  2. Competitors feel the same pressure. CRISIL volume has decreased 1% and profit decreased 7%, although CRISIL has a far diversified business than CARE.

So it appears that the choice for rating agencies has been to take the business at lower margins, or to forsake the business.

(AKGupta) #251

Your second point seems more valid and applicable.
I hope this moment of multiple crises for the ratings industry triggers consolidation so that this trend of price erosion is arrested.