Here are the two management interactions with the media post their results (video1, video2). The new MD has started making the right noises, here are my notes:
- Total debt rated (bank + capital market) declined from 19.9 lacs cr. to 12.73 lacs cr. (decline of 36%) translating into topline de-growth of ~23.5%
- ~70% of ratings have been towards surveillance while ~30% have been towards new issue
- Professional cost has increased and will increase going forward to ensure industry benchmark salary & to ensure superior talent profile for rating of debt (low employee cost has been the reason for very high margins in the past)
- There will be additional spending on technology going forward which over the longer time will offset increased professional costs
- 99% revenues of CARE standalone entity comes from rating
- To diversify, will use cash on the balance sheet to grow into new business lines rather than doing buyback
- Focus will be to grow new business lines: Data analytics, Research services, Risk management, Fraud protection, Market intelligence unit. Plans to acquire new talent to expand into these business lines
Unfortunately, I missed the morning conference call. I will update my notes once the transcripts are made available.
Its time to see how efficient the management is in diversifying their revenue base and building new business lines. I see a lot of webinars organized by CARE training, their research and analytics business should provide growth, execution is the key!
Disclosure: Invested (latest position size here)