CARE Ratings on Monday reported 28.9 per cent year-on-year decline in its consolidated net profit at Rs 50.22 crore for the half year ended September 30, 2019, impacted by ongoing crisis in the NBFC sector as well as decline in economic growth.
"The rating agency had posted net profit of Rs 70.63 crore during the same quarter last year," CARE Ratings said in a filing to the Bombay Stock Exchange (BSE).
For the half year ended September 2019, the firm's revenue from operations fell 22.4 per cent to Rs 121.55 crore as compared to Rs 156.65 crore in the year-ago period. Consolidated total income for the period ended September 30, 2019 was Rs 138.45 crore as against Rs 168.66 crore last year. Total expenses increased by 12.1 per cent to Rs 77.18 crore in H1FY20 versus Rs 68.83 crore in H1FY19.
CARE Ratings' operating profit stood at Rs 44.37 crore as against Rs 87.81 crore in the previous year's period, registering a decline of 49.5 per cent.
The major factors affecting results include, the prolonged period of headwinds faced by the non-banking financial company (NBFC) sector, decline in capex formation in private sector and substantial decline in economic growth, CARE Ratings said in the exchange filing.
During H1 FY20, the company has rated total debt of Rs 5.67 lakh crore compared with Rs 8.13 lakh crore in the half year ended September 30, 2018 for new clients. This comprises Rs 2.31 lakh crore in bonds (Rs.2.75 lakh crore last year), Rs 2.11 lakh crore in bank loans (Rs 3.54 lakh crore last year) and Rs 1.25 lakh crore in short term ratings, including Commercial Paper (Rs 1.84 lsakh crore last year).
Commenting on Q2 earnings, T.N. Arun Kumar, Interim CEO, CARE Ratings said, "The Indian economy continued to show signs of weakness even during the second quarter of the ongoing fiscal year, which will have a bearing on our business going ahead. However, various measures announced by the government to arrest the slowdown in the economy, festive season and expectation of pick up in the consumer demand, especially rural demand post-harvest, could bode well for the Indian economy during the second half of the fiscal year 2019-20. We would be keenly following how things shape up in the second half of the year."
The company's board has declared the second interim dividend of Rs 8 per equity share of face value of Rs 10 for the financial year 2020 and has fixed November 20, 2019 as the record date for the same.
Ahead of the earnings announcement, shares of CARE Ratings closed 0.62 per cent lower at Rs 532.45 apiece on the Bombay Stock Exchange on Monday.
Edited by Chitranjan Kumar