Why CARE Ratings stock rallied 20% on Wednesday

Why CARE Ratings stock rallied 20% on Wednesday

Shares of CARE Ratings hit upper circuit limit of 20 per cent at Rs 365 on the BSE after the company reported strong numbers in September quarter

CARE Ratings shares ended 19.99% higher at Rs 365.20 on the BSE CARE Ratings shares ended 19.99% higher at Rs 365.20 on the BSE

Shares of CARE Ratings shot up 20 per cent to Rs 365 on Wednesday, hitting the upper circuit on the BSE, after the company reported strong earnings for the second quarter ended September 30, 2020. There was spurt in volume trade as 2.81 lakh shares changed hands over the counter as compared to two-week average volume of 0.15 lakh shares.

CARE Ratings posted nearly four-fold jump in its consolidated net profit at Rs 35.84 crore in Q2 FY21 compared to Rs 9.69 crore in Q1 FY21. On year-on-year basis, its profit moderated from Rs 36.73 crore in Q2 FY20. Revenue from operations doubled to Rs 75.87 crore from Rs 37.38 crore in the June quarter of the current fiscal. The rating agency released earnings report post market hours on Tuesday.

For the first half year (April-September period), the consolidated profit fell 4 per cent YoY to Rs 47.94 crore, while operating revenue dropped 5 per cent YoY to Rs 113 crore.

The company's board has approved the payment of interim dividend of Rs 8 per equity share of face value of Rs 10 each for the financial year 2020-21.

"We are seeing sequential improvement in some of the high frequency monthly economic indicators which are on expected lines as we do expect quarterly GDP growth to improve over Q1 and turn marginally positive in Q4," said Ajay Mahajan, MD & CEO of CARE Ratings.

"The announcement of on-tap TLTROs and the government's additional spending on capex should help to revive private investment and we would be keenly watching whether this will lead to more differentiated issuances in the bond market which is still biased towards the financial sector," he said.

On macro-economic environment, the company said that it is improving since June due to the unlock measures, albeit it remains in the negative territory as evidenced by the growth in credit to manufacturing and services sectors which are the quick indicators of economic activity.

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Published on: Nov 04, 2020, 5:20 PM IST
Posted by: Chitranjan kumar, Nov 04, 2020, 5:20 PM IST