CARE Ratings and ICRA have evolved into distinct investment propositions despite operating in the same ratings business. According to reports from Value Research, nearly 89% of CARE's FY26 revenue came from ratings alone, while ICRA generated ₹336 crore from ratings against ₹266 crore from research, analytics and financial technology, representing a 56:44 split. This fundamental difference in revenue composition has created two very different investment stories, with CARE maintaining strong margins while ICRA pursues diversification through acquisitions.
Both companies have demonstrated strong growth trajectories over the past five years, as reported by Value Research. CARE achieved a 5-year revenue CAGR of 13.7% and profit after tax CAGR of 13.8%, while maintaining an average operating margin of 33.6%. ICRA outperformed with a 5-year revenue CAGR of 14.8% and profit after tax CAGR of 17.2%, though its operating margin remained lower at 32.2%. The companies' average return on equity stood at 15.5% for CARE and 15.6% for ICRA over the five-year period.
CARE's operational efficiency became evident in FY26, with rating revenue rising to approximately ₹423 crore, up nearly 18%, while standalone revenue grew 15% and standalone operating margin reached 48%. As reported by Value Research, this exceptional margin performance is attributed to CARE's fixed cost structure, where analysts, rating committees, and databases are already in place before new assignments arrive. Employee costs grew only 11% and consumed 42% of standalone revenue, compared to approximately 49% at ICRA. In contrast, ICRA's research and analytics segment earned a 24% segment margin in FY26, significantly below CARE's ratings business economics.
ICRA has pursued aggressive diversification through acquisitions, paying close to ₹250 crore for Fintellix alone to expand its research and analytics capabilities. According to Value Research, this segment now represents nearly four-fifths the size of ratings and covers risk models, bond valuation, banking technology, and the newly acquired Fintellix platform. Meanwhile, CARE's non-rating business brought in only about ₹50 crore in FY26 and remained near breakeven, with CareEdge Analytics selling similar risk products but struggling to scale beyond its current size.
The market has recognized the divergent strategies, with ICRA's valuation closing the gap from approximately ₹4,400 crore in late 2022 to around ₹1,800 crore for CARE. As reported by Value Research, this convergence occurred as CARE recovered from IL&FS-era credibility issues and its rating growth returned, while ICRA maintained its ratings franchise growth without losing meaningful market share. The key metrics to watch include whether ICRA's research and analytics margin climbs toward ratings business economics and whether CARE's non-rating revenue breaks meaningfully past the ₹50 crore mark it has been stuck near for years. Until these metrics show meaningful improvement, CARE appears to be running the better business while ICRA builds the bigger one through strategic diversification.
