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Credit Analysis & Research Ltd.

BSE: 534804 Sector: Others
NSE: CARERATING ISIN Code: INE752H01013
BSE LIVE 15:59 | 05 Dec 1399.00 7.70
(0.55%)
OPEN

1398.05

HIGH

1408.55

LOW

1381.00

NSE LIVE 15:53 | 05 Dec 1404.40 5.90
(0.42%)
OPEN

1398.50

HIGH

1409.85

LOW

1381.25

OPEN 1398.05
PREVIOUS CLOSE 1391.30
VOLUME 583
52-Week high 1572.50
52-Week low 885.00
P/E 31.62
Mkt Cap.(Rs cr) 4118.66
Buy Price 1399.00
Buy Qty 22.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1398.05
CLOSE 1391.30
VOLUME 583
52-Week high 1572.50
52-Week low 885.00
P/E 31.62
Mkt Cap.(Rs cr) 4118.66
Buy Price 1399.00
Buy Qty 22.00
Sell Price 0.00
Sell Qty 0.00

Credit Analysis & Research Ltd. (CARERATING) - Chairman Speech

Company chairman speech

The Indian economy was expected to progress at a faster rate in FY16 which in turnwould have necessitated higher levels of funding that would provide a boost to the debtand credit markets. However the overall performance of the economy was mixed. The overallGDP growth was higher at 7.6% as against 7.2% in FY15 but limited traction was seen inindustrial growth. In fact overall investment did not pick up this year too. Thecorporate debt market however witnessed issuances in FY2016 to Rs 4.9 lakh crore ascompared to previous year issuance of Rs 4.1 lakh crore. This comprised mainly privateplacements which accounted for 93% of the total issuance. But bank credit growth which ismain parameter of growth in credit rating business has remained subdued.

Against this background I am pleased to inform you that your company has emergedstronger and has been resilient. Your Company has now completed 46881 rating assignmentssince inception to March 2016 with cumulative debt rated increased to Rs. 78.8 lakh croreas of March 2016. As of March 31 2016 your company had business relationships with12373 clients adding about 3105 new clients this year. In terms of finances operatingincome on a consolidated basis saw an increase of 7.2% to Rs 279.3 crore in FY16. Alsooperating profit margin improved to 60.7% mainly due to growth in revenues and controlgrowth in expenditure.

I am also happy to inform you that CARE Ratings was the leader in terms of the numberof private placement issues in FY16 rating around 891 out of the 2760 issues that wereprivately placed. The focus of your company for this year was more on client acquisitionthan business volumes and it was reflected in the performance of the company. We continueto have a dominant position in terms of having the largest proportion of rated companiesin the ET-500 FE-500 and BS-1000 companies at 52% 50% and 44% respectively.

We have been simultaneously concentrating on building and developing new products overthe course of the year. Your company has started a new service called CARE Rating Tracker(CART) which provides data on Rating History of over 40000 entities covering all sixCredit Rating Agencies. We have also launched the rating of Real Estate Investment Trusts(REITs). The company has also brought out CARE Debt Quality Index a monthly indicatorwhich tracks the changes in overall quality of debt in the economy based on arepresentative sample of companies. CARE also entered into an agreement with GREXAlternative Investments Market to provide a broad analytical framework within which yourcompany will be involved in conducting Rating/Grading exercises for companies.

As a part of our global ventures we have signed a MoU with JCR (Japan Credit RatingAgency) to collaborate with each other as strategic business partners. Also CARE Ratings(Africa) Private Limited (CRAF) is now operational and has also completed its first ratingassignment. The Company is also exploring possibility of spreading credit rating businessin the globe and desired to become top international rating company in due course.

Going forward with the government initiatives such as 'Make in India' 'StartupIndia' 'Standup India' 'Skill - India' and Smart cities' we do expect the investmentcycle to pick up gradually. Recent measures announced by the RBI to deepen the bond marketcan be seen as a positive sign for the rating agencies particularly rated corporate bondsto be considered under Liquidity Adjustment facility (LAF). Also with the banks aiming atcleaning up their books they would be more cautious while lending. This would encouragecompanies to take larger recourse to the corporate debt market. All this should startshowing some results from next year onwards.

However we would continue to be conservative in our approach and follow the path ofcautious optimism for next year furthermore the Company will explore the possibility tobuild up sizable revenue and profit from non-rating business.

S.B. Mainak Chairman - Mumbai

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