Crisil's 2Q profits drop by 18% - Views on News from Equitymaster

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Crisil's 2Q profits drop by 18%

Oct 30, 2000

Credit Rating and Information Services of India Ltd. (Crisil) has reported a year on year 18% drop in its profits in 2QFY01 to Rs 23 m. Considering the reduction in the rated debt market, the company has done appreciably well with a topline growth of 38%.

(Rs m) 2QFY00 2QFY01 Change
Income from operations 83 114 37.6%
Other Income 11 6 -49.0%
Expenditure 43 68 55.7%
Operating Profit (EBDIT) 40 47 17.8%
Operating Profit Margin (%) 47.7% 40.8%  
Interest - -  
Depreciation 6 15 133.6%
Profit before Tax 45 37 -16.2%
Tax 17 15 -13.7%
Profit after Tax/(Loss) 28 23 -17.7%
Net profit margin (%) 33.5% 20.0%  
Diluted number of shares (m) 6.2 6.2  
Diluted Earnings per share* 17.9 14.7  
*(annualised)      
P/E (at current price) 10 13  

Crisil's bottomline took a severe hit due to decline in other income and increase in depreciation cost. Other income declined considerably, since during the year it utilised its treasury in acquiring the business of Information Products and Research Services India Pvt. Ltd alongwith its brand 'Infac'. Depreciation cost was higher by 133% due to acquisition of brand and purchase of new office premises.

Its operating profit margins also declined to 40.8% due to 28% increase in staff expenditure. The increase in expenses is mainly due to the company's dotcom initiatives.

At the current market price of Rs 185, Crisil is trading at PER of 15 times its 2QFY01 annualised earnings.

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