When global rating agencies revised their sovereign debt ratings for France and Portugal earlier this year, aligning them with those of Care Ratings, they “vindicated” the stance of the Indian rating agency that launched its fledgling sovereign rating business just over a year ago, a top official at Care Ratings said.
Care Ratings assigned an A+ rating to Portugal in February and to France in September. Meanwhile, S&P Global Ratings raised its Portugal rating to A+ in August and lowered France to A+ in October. The management of Care Ratings sees this as a win for the company’s new business and a solid start to its global ambitions.
“This is a vindication of the robustness of our model and I give full credit to our team, which prepared for over three years before we launched our commercial operations,” said Mehul Pandya, managing director and group chief executive officer, CareEdge Group (the group-level brand identity of the company).
“It takes a bit of courage to stand out because one of the criticisms of rating agencies is convergence bias – everybody gives the same rating, so if anything fails everybody is to be blamed equally,” added Pandya, who was elevated to chief executive of India’s second-largest rating agency in 2022.
Global expertise
He said the company’s global ratings are backed by experts who have worked on similar assignments elsewhere and that its ratings committee has external members from Europe, Africa, Australia and Singapore, among other places. This, Pandya said, was meant to ensure that no home-country bias seeped in. Paul Coughlin, who chairs the ratings committee, spent 26 years at S&P, where he was the executive managing director and global head of the credit ratings group. Care Ratings rates India at BBB+, a notch above S&P’s rating after the recent upgrade.
“Within a year of operations, we have seen a greater receptivity across developed and emerging economies towards our rating,” said Pandya. “More and more countries have started engaging with us.”
He added, “We always had this predicament that when our clients wanted to go for an overseas bond issuance, they were compelled to deal with somebody else because we could not offer that service.” Now that Care offers global ratings, he said, it could lead to increased revenue for the non-rating business, too, as clients tap other services of the group.
Care Ratings created a subsidiary at GIFT City to rate overseas and sovereign debt in 2024. So far, it has assigned ratings to domestic companies for $4 billion of overseas debt issuances. Pandya said the company plans to reach out to issuers in emerging economies in Asia and Africa to rate debt issuances from these economies.
Sovereign ratings are unsolicited, meaning that economies do not pay for these, unlike companies, which seek to be rated and pay a fee for it. Care currently rates 39 countries spanning Asia, the Americas, Australia and Europe, and aims to increase this to 45 soon.
Analysts bullish
Care Ratings reported a consolidated net profit of ₹83.7 crore over April-September 2026, up 23% from the same period last year, and ₹230.3 crore of revenue. Its ratings business accounted for 89% of revenue for the April-September period of FY26. At ₹205.8 crore, it was 16% higher than in the same period of FY25. The non-ratings business includes advisory, analytics and environment, social and governance (ESG) assessments.
Analysts are quite bullish about the company’s prospects. Yes Securities (India) said it continues to believe Ebitda margin could expand by 300-400 basis points (bps) between FY25 and FY27, driven by improvements in domestic and global ratings. Care Ratings’ Ebitda margin was 38.6% in FY25, according to data from the Yes Securities note from September. “Care continues to evaluate meaningful inorganic growth opportunities in non-ratings space which can offer synergies of new markets addition or new products addition and are available at palatable valuation,” the note added.
Pandya also said the company was open to acquisitions, should a good opportunity present itself at the right valuation. “It has to be a hardcore value addition in terms of our strategic initiative for the future, potentially giving us access to new geographies and new products,” he added.
Care Ratings faced a slew of challenges before Pandya’s appointment. In 2019, then chief executive Rajesh Mokashi resigned five months after he was placed on leave following an anonymous complaint to the Securities and Exchange Board of India (Sebi) which alleged that the management influenced rating decisions. The subsequent CEO, Ajay Mahajan, resigned in 2022 citing “personal reasons”. Pandya’s tenure so far has seen Care restore its reputation as a credible rating agency both in India and overseas.