Care Ratings: Best EBIDTA margin in the industry of 63%; Buy

Jainam Research | Jan. 21, 2019, 8:53 a.m.

Recommendation

Care continues to focus on high margin segment as the majority of the business is derived from the rating segment and this margin is way higher than the industry leader who enjoys just 25% EBIDTA margin and this EBIDTA margin of care ratings is expected to remain constant due to rising focus on low margin SME business.
The OPM of the company is consistent around 63% over the years and ROE of the company is also around 30% in the past recent years. Management is quite focused towards one business segment and also willing to expand their client base.CARE is available at lower valuations as compare to its industry peers. We recommend our Investors to “BUY" the stock with potential upside of 36% with Horizon of 2.5 years.



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