CARE Ratings Limited Fair Value
CARERATING · Financial Services · Current price ₹1,597.2
Is CARE Ratings Limited undervalued?
We estimate the fair value of CARE Ratings Limited at ₹569 per share, against a market price of ₹1,651. That puts the share price about -65.5% above our estimate, at medium confidence. This is our view of what the business is worth, not a target price or a forecast of where the share price will go.
How this fair value is calculated
This estimate comes from 2 methods: Residual income (excess return on book) (₹615), Discounted cash flow (2-stage) (₹495). Each is weighted by how well its inputs held up for this company. The full working, including the assumptions and what data was missing, is set out below.
The range around this estimate
Our estimate for CARE Ratings Limited spans ₹495 to ₹625. A margin of safety means buying meaningfully below the estimate: the wider the range, the more room the assumptions leave for error.
How we got this fair value
Every number below is part of the same estimate for CARE Ratings Limited. Nothing here is a target price or a forecast of where the share price will go.
Workable, with real gaps. Weigh it alongside your own view rather than on its own.
Estimate range ₹495 – ₹625
Why this method for this business
Residual income and DCF are appropriate for a ratings agency with durable moat and stable cash flows. These models capture the value of book equity and future earnings power.
The models behind the number
Each method is weighted by how well its inputs held up for this company.
Book value plus the present value of returns earned above the 10.6% cost of equity
Intrinsic value from 2-stage discounted cash flows (primary for asset-light / normal businesses); FCFE path
- relative_pe: not suitable for a non-cyclical, asset-light business with high book value
- other models not applicable due to lack of forward data
What was missing
- Forward estimates
- Detailed information on regulatory risks
- Recent news impacting the ratings industry
What drives it
17 inputs, grouped by how strong each claim is
- ROE (normalized)
- 14.8%
- Book value / share
- 310 ₹
- FCF_0 (normalized)
- 104 ₹cr
- Net debt
- 26 ₹cr
computed
reported
fcf_norm (median ≤5y positive)
gross debt (cash n/a)
- Cost of equity
- 10.6%
- Discount rate (r)
- 15.53%
- Beta
- 1.15
building-block
COE (building-block)
bottom-up industry
- Stage-1 start growth
- 13.84%
- Fade shape
- linear
- Terminal growth (g)
- 5.38%
- Stage-1 years
- 10 y
pat_cagr_5y
lifecycle Growth
macro terminal × quality premium
lifecycle Growth horizon
- Moat
- Wide
- Excess-return horizon
- 20 yrs
- Lifecycle stage
- Growth
- Quality premium
- 1.076×
computed
computed
forecast engine (L20)
moat Narrow + capital allocation
- Path
- FCFE
- Terminal-value fraction
- 0.429
computed (D/E vs 0.8)
PV_TV / (PV_1+PV_TV)
Who computed this
A language model (qwen3:8b) selects the valuation method and the judgement inputs for CARE Ratings Limited: which models suit the business, the moat, the growth and margin assumptions. It does not produce the number. The fair value itself is computed in Python by a deterministic engine (version 2026.08.1) from those inputs, so the same inputs always give the same result and every figure above can be traced to a source.
Estimated 15 Sept 2026. Re-run as new financials and news arrive.
How we value stocks
We estimate what a business is worth from its own economics: cash flows, returns on capital, and a multiple justified by its quality, rather than from where the share price has been. A fair value estimate is a view, not a verdict, and it is only as good as the inputs listed above.
Read the full fair-value methodologyMore on CARE Ratings Limited
DocStoX estimates are computed from reported financials, for informational purposes only, not investment advice. Consult a SEBI-registered advisor before investing.