Shares in CARE Ratings surged 10% to Rs 457.15 on the BSE in Wednesday’s trade after the company said its board would consider a share buyback program on July 20.

CARE Ratings rose 9.6% to Rs 455 at 9.38 am. In contrast, the S&P BSE Sensex gained 0.35% to 54,075. OTC volumes more than quadrupled, with about 520,000 shares changing hands on the NSE and BSE.

The stock hit a 52-week low of Rs 402.75 on May 11, 2022. The stock has nearly halved (down 49%) from its 52-week high of Rs 783.25 on August 3, 2021.

Over the past six months, CARE Ratings has underperformed the market, down 27%, while the S&P BSE Sensex has lost 12%. It has lost 36% over the past year, while the benchmark index has gained 2.6%.

The main goal of a share repurchase program is to stem the decline in a stock’s value by reducing the supply of shares, which drives the stock price higher through a better price-to-earnings (P/E) multiple.

CARE Rating’s consolidated total revenue fell 14.3% to Rs 73.06 crore in the fourth quarter ended March 2022 (Q4FY22) from Rs 85.25 crore, mainly due to the cancellation of provision last year. Consolidated net profit from Rs 26.49 crore Rs fell to Rs 23.31 crore. Consolidated financials include those of CARE Ratings and its four subsidiaries.

The government has established a strong capital spending plan in FY23, and private investors have also shown encouraging investment intentions. However, Ajay Mahajan, managing director and chief executive officer of CARE Ratings Ltd, said recent global and domestic uncertainties could cause delays in the recovery of private investment.