Crisil has reported an impressive 29% growth in topline on the back of increased rating business in the current year. Crisil has rated companies in industries such as media and airlines in FY01, which were hitherto not rated in India. The company's profits however, declined by 25%.
Income from Operations
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy) (m)
Diluted Earnings per share
P/E (at current price)
Crisil's operating profits took a severe hit due to higher staff cost and professional expenses, which rose by 52% and 282% respectively. Professional fees was higher on the back of rise in payment of outsourcing charges to Rs 28 m from Rs 2 m in FY00. These factors led to a sharp decline in its operating margins to 32.6% from 46.9% in the previous year. Also, depreciation cost was higher by 83% due to acquisition of brand 'Infac' and purchase of new office premises.
Other adjustments is on account of profits on sale of fixed assets, property rights and investments. Excluding these items the profits of the company drop by 27%.
At the current market price of Rs 115 Crisil is trading at PER of 7 times its FY01 earnings and a Price/Book value ratio of 1x. Crisil's topline growth was satisfactory considering the widespread difficulties in the economy and industry. However, due to higher operating expenses the company's net took a hit. As a result the re-rating of the stock is highly linked to its ability to show an improvement in operating margins and generate the returns on the amount invested (acquisition of Infac) by it in the current year.
LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India. Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407