CARE Ratings share climbs over 14% as board considers share buyback plan

CARE Ratings shares rose 14.51% to Rs 475.6 on the BSE on Wednesday after the company announced that its share buyback plan will take place on July 20, Wednesday.

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CARE Ratings was trading 13.89% higher at Rs 473.05 at 11:40 a.m. on high volumes. The S&P BSE Sensex, on the other hand, was up 0.35% at 54,075 points. Trading volumes on the counter had more than fivefold increased, with a total of about 520,000 shares changing hands on the NSE and BSE.

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On May 11, 2022, the stock reached a 52-week low of Rs 402.75. It has almost halved (down 49%) since its 52-week high of Rs 783.25 on August 3, 2021.

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CARE Ratings has underperformed the market during the last six months, falling 27% vs a 12% drop in the S&P BSE Sensex. It has fallen 36% in the last year, compared to a 2.6% growth in the benchmark index.

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A share buyback plan’s primary goal is to halt the decline in the value of a stock by lowering supply, which effectively drives up the stock price through a higher price to earnings (P/E) ratio.

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CARE Rating’s consolidated total income declined 14.3% in the fourth quarter ended March 2022 (Q4FY22), from Rs 85.25 crore to Rs 73.06 crore, owing mostly to the reversal of provision last year. The company’s consolidated net profit fell from Rs 26.49 crore to Rs 23.31 crore. CARE Ratings and its four subsidiaries are included in the consolidated financials.