Crisil, the credit rating major, has announced a healthy growth in its topline for 3QFY03. The bottomline however, has not grown on a commensurate basis. For 3QFY03 the company has reported over 8% growth in topline, but bottomline growth was marginal at 1% on a YoY basis. This, despite a 91% YoY jump in its other income.
Rs m) | 3QFY02 | 3QFY03 | Change | 9mFY02 | 9mFY03 | Change |
Income from operations | 160 | 174 | 8.5% | 440 | 488 | 10.9% |
Other Income | 6 | 11 | 91.1% | 15 | 22 | 53.4% |
Expenditure | 73 | 83 | 13.7% | 227 | 259 | 14.1% |
Operating Profit (EBDIT) | 87 | 91 | 4.2% | 213 | 229 | 7.4% |
Operating Profit Margin (%) | 54.6% | 52.4% | 48.4% | 46.9% | ||
Interest | 0 | 0 | 0 | 0 | ||
Depreciation | 16 | 19 | 21.8% | 55 | 53 | -3.6% |
Profit before Tax | 77 | 82 | 7.0% | 172 | 198 | 14.8% |
Tax | 23 | 28 | 21.1% | 59 | 70 | 18.6% |
Profit after Tax/(Loss) | 54 | 55 | 1.0% | 113 | 128 | 12.9% |
Net profit margin (%) | 33.9% | 31.6% | 25.7% | 26.2% | ||
No. of Shares (m) | 6.2 | 6.2 | 6.2 | 6.2 | ||
Diluted Earnings per share | 34.8 | 35.2 | 24.2 | 27.4 | ||
P/E (at current price) | 8.0 | 10.2 |
(Rs m) | 3QFY02 | 3QFY03 | Change | 9mFY02 | 9mFY03 | Change |
Staff expenses | 38 | 43 | 11.5% | 104 | 127 | 21.8% |
Establishment expenses | 12 | 13 | 10.2% | 44 | 43 | -0.8% |
Professional fees | 12 | 13 | 14.6% | 40 | 39 | -2.7% |
Other expenses | 11 | 14 | 24.0% | 39 | 50 | 27.5% |
Total | 73 | 83 | 13.7% | 227 | 259 | 14.1% |
In the December quarter, the company launched a new product called 'CRISIL Governance and Value Creation' ratings. This new product aims to assess corporate governance practices within the organisation. The company has also completed the project on evaluation of the power sector in 15 Indian states. Crisil has identified new rating areas like training and education as its main growth drivers in the future. In the next three years, Crisil plans to bring down the proportion of rating revenues to total revenues to 40% (over 70% currently) to reduce its overdependance on rating fees. Although, this will lead to a gradual decline in operating margins, topline growth would remain healthy.
Crisil has forecasted a CAGR of 31% in total revenues for the next three years. This would be achieved by diversifying into areas including advisory, selling research and information based products. Currently, the company has strong presence in debt market areas. It also sees opportunities in providing research based products and information about equity markets. S&P's relationship would further assist the company in generating revenues by outsourcing its database for projects in emerging markets. Crisil has already started providing technical consultancy for setting up of rating agencies in the emerging markets.
Crisil's wholly owned subsidiary, Cris-Risc (earlier On a consolidated basis, the company's revenues grew by 11% to Rs 185 m. Profits have however fallen by 8% to Rs 50 m. This has been due to the more than proportionate increase in the operating expenses of the company. Operating margins have fallen by nearly 400 basis points. Consolidated accounts include performance of CRIS, Cris-Risc, Global Data Services and Crisil Properties. Global Data Services is expected to break even in the next two years. At the current market price of Rs 280 , Crisil is trading at a P/E of 10x 9mFY03 annualised earnings. We have projected a conservative 7-8% growth in pre tax profits for the current fiscal. Consequently, on FY03 forecasted EPS, Crisil gets P/E multiple of about 8x. In the last five years, the company has traded in the average P/E range of 12-40x. With competition increasing and margins under pressure the stock seems fairly valued and may remain lacklustre in the short term.
Here's an analysis of the annual report of CRISIL for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of CRISIL. Also includes updates on the valuation of CRISIL.
For the quarter ended March 2020, CRISIL has posted a net profit of Rs 881 m (up 15.0% YoY). Sales on the other hand came in at Rs 4 bn (up 2.9% YoY). Read on for a complete analysis of CRISIL's quarterly results.
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For the quarter ended December 2019, CRISIL has posted a net profit of Rs 953 m (down 16.2% YoY). Sales on the other hand came in at Rs 5 bn (down 0.6% YoY). Read on for a complete analysis of CRISIL's quarterly results.
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