Another average set of results from the company. The ratings revenue grew at ~4% which slower than both ICRA (8%) and CRISIL (7%). Additionally, there is churn at mid to senior management level. Shareholders were very agitated on management’s response to buyback, plus no specific reason was given for departure of Ajay Mahajan. Concall notes below.
- FY22 ratings revenue growth: 1% reported but higher at 4% on a likewise comparison as last year had a write back of provisions (CARE), 8% (ICRA), 7% (CRISIL)
- 4% ratings growth was largely due to new business rated
- Sri Lanka: CARE Risk has on-going projects in Sri Lanka which is suffering from non-remittance of funds from Sri Lanka for which company has provided for. Amount should be realized as its for public sector banks in Sri Lanka (total exposure: 9.46 cr.). Adjusting for provisions, exposure is 2.36 cr.
- Capital infusion for business diversification: 33.5 cr. in CARE Risk Solutions and 10 cr. in CARE Advisory Research & Training (CART)
- CART has started providing ESG research to AMCs
- Capex cycle revival has been on hold now after Russia Ukraine crisis as corporates have put some capex plans on hold
- 40-45% growth in advisory business (on a small base)
- ESOP charge: 6.29 cr. in FY22 vs 3.56 cr. in FY21
- High amount of attrition in mid to high level management
Disclosure: Invested (position size here, no transactions in last-30 days)