'Buy' CARE Ratings Shares Maintains Yes Securities — Check Target Price

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Yes Securities Report

We maintain our consolidated revenue/Ebitda/PAT CAGR estimates of 17%/22%/20% over FY25-27. We continue to believe that Ebitda margin could expand by 300-400 bps during the aforesaid period, driven by improvement in domestic ratings (operating leverage + instrument mix shift + pricing efforts), non-ratings businesses (mainly led by Analytics), and Global Ratings (operating leverage).

Ebitda margin in domestic ratings was 200 bps higher in Q1 FY26, and it improved by 200 bps through FY25. CARE Ratings Ltd. continues to evaluate meaningful inorganic growth opportunities in non-ratings space which can offer synergies of new markets addition or new products addition and are available at palatable valuation.

Retain positive view on Care Ratings with valuation reasonable at 24x FY27 P/E for the envisaged earnings growth/RoE trajectory and potential inorganic fillip.

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