Q4FY13: CARE Posts Good Numbers

Credit Analysis and Research (CARE), a rating company, announced its Q4FY13 result post market on 16 May 2013, along with its FY13 results. The share price of the company reacted positively considering the good financials of the company. CARE's share price is 5% up from the previous closing price on May 15, 2013.

The major revenue generator for the business is income earned from providing rating services, which grew by 39% to Rs 63 crore in Q4FY13 on a YoY basis. While on a consolidated basis, income from rating services showed a growth of Rs 23.5 crore, up by 13% for FY13 against the revenues in FY12. This growth is due to an increase in the number of assignments during FY13. During FY12, CARE had 5980 assignments which increased to 7692 during FY13. Its client base also increased to 5263 in FY13 against 3900 in FY12.

However, on account of an increase in operations, the company increased its workforce, which led to a rise in its operating cost. The total operating expenses increased by 32% to Rs 20 crore in Q4FY13 on a YoY basis. More than 70% of its total expenditure of is employed on the workforce.

Further, due to the increase in assignments, the company’s EBITDA zoomed by 42% in Q4FY13 as compared to Rs 44 crore in the corresponding quarter of FY12. This has boosted the operating margin in the quarter by 161 basis points.

The bottomline of the company stood at Rs 35.6 crore by showing a growth of 28%. Due to higher increase in tax expenses in this period, its net margin got impacted and showed a decline of 484 basis points.

In spite of a slowdown in the economy, the company has posted a healthy performance during this period. Investors can thus look forward to invest in this counter.