We would like to share with you details on the stock recommendation to our Alpha and Alpha + members in the month of Aug’13 – Credit Analysis and Research Ltd (NSE Code – CARERATING) at Rs 525/- (CMP – 690)
The report has now been made public and is available for reading/downloading at the below provided links.
CARE is a Credit Rating, Research and Information Services company promoted in 1993 by major banks/financial institutions (FIs) in India. The three largest shareholders of CARE are IDBI Bank, Canara Bank and State Bank of India.
CARE’s operations can be divided into two divisions: Credit Rating and Research & Information Services. It offers a wide range of rating and grading services across a diverse range of instruments and industries and also provides general and customized industry research reports on subscription basis; however CARE’s rating business accounts for more than 98% of its revenue and profits.
Corporate debentures/bonds and bank loan facilities account for ~85% of the number of rating assignments carried out by the company.
Despite starting four years after ICRA, CARE is now the second largest credit rating agency in India in terms of revenue.
Credit Rating business has witnessed significant developments in the last two decades and the long term prospects seem promising. Further, as the financial metrics of the industry are strong with high return ratios and high free cash flow generation, we believe, from an investors perspective Credit Rating companies are good long term investment avenues if picked at good valuations.