Centrum Broking: CARE Ratings’ Q1 Revenue Miss Led By Lower Rating Mandates
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Centrum Broking Report
CARE Ratings Ltd. Q1 FY21 overall earnings missed estimates driven a sharp decline in revenue (down 26.9% YoY) and the management attributes this largely to a sharp drop in volumes of new rating mandates stemming from lower borrowings by non-banking financial companies and muted capex in corporate sector.
Volume of debt rated fell by 33.6% YoY in Q1 FY21. Ebitda missed estimate driven by revenue. Other expenses normalised during the quarter (last quarter saw a spike) while employee cost followed the usual trajectory.
FY21 remains challenging given the Covid-19 related slowdown, however FY22 may see a recovery given the low base effect and an improving macro environment.
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