CRISIL 2016-17 Annual Report Analysis

Sun, 31 Dec

CRISIL has announced its results for the year ended December 2017. Let us have a look at the detailed performance review of the company during FY16-17.

CRISIL Income Statement Analysis

• Operating income during the year rose 7.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 2.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.5% in CY17 as against 28.6% in CY16.
• Depreciation charges decreased by 14.5% increased by 0.0% YoY, respectively.
• Other income declined by 48.9% YoY.
• Net profit for the year grew by 3.4% YoY.
• Net profit margins during the year declined from 19.0% in CY16 to 18.4% in CY17.

CRISIL Income Statement 2016-17

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*	% Change
Net Sales	Rs m	15,475	16,585	7.2%
Other income	Rs m	497	254	-48.9%
Total Revenues	Rs m	15,972	16,838	5.4%
Gross profit	Rs m	4,433	4,553	2.7%
Depreciation	Rs m	545	466	-14.5%
Interest	Rs m	0	4	0.0%
Profit before tax	Rs m	4,385	4,336	-1.1%
Tax	Rs m	1,442	1,292	-10.4%
Profit after tax	Rs m	2,943	3,044	3.4%
Gross profit margin	%	28.6	27.5
Effective tax rate	%	32.9	29.8
Net profit margin	%	19.0	18.4

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CRISIL Balance Sheet Analysis

• The company's current liabilities during CY17 stood at Rs 4 billion as compared to Rs 4 billion in CY16, thereby witnessing an increase of 11.3%.
• Current assets fell 26% and stood at Rs 7 billion, while fixed assets rose 85% and stood at Rs 8 billion in CY17.
• Overall, the total assets and liabilities for CY17 stood at Rs 15 billion as against Rs 14 billion during CY16, thereby witnessing a growth of 7%.

CRISIL Balance Sheet as on December 2017

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*	% Change
Networth	Rs m	9,227	9,814	6.4
Current Liabilities	Rs m	3,852	4,287	11.3
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	13,681	14,600	6.7
Current assets	Rs m	9,606	7,068	-26.4
Fixed Assets	Rs m	4,075	7,532	84.9
Total Assets	Rs m	13,681	14,600	6.7

CRISIL Cash Flow Statement Analysis

• CRISIL's cash flow from operating activities (CFO) during CY17 stood at Rs 3 billion, an improvement of 4.2% on a YoY basis.
• Cash flow from investing activities (CFI) during CY17 stood at Rs -2 billion, an improvement of 615.8% on a YoY basis.
• Cash flow from financial activities (CFF) during CY17 stood at Rs -2 billion, an improvement of 18% on a YoY basis.
• Overall, net cash flows for the company during CY17 stood at Rs -752 million from the Rs 330 million net cash flows seen during CY16.

CRISIL Cash Flow Statement 2016-17

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-16	Dec-17
Cash Flow from Operating Activities	Rs m	2,790	2,907	4.2%
Cash Flow from Investing Activities	Rs m	-247	-1,767	-
Cash Flow from Financing Activities	Rs m	-2,269	-1,866	-
Net Cash Flow	Rs m	330	-752	-

Current Valuations for CRISIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 42.5, an improvement from the EPS of Rs 41.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,872.8, stands at 44.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 13.9 times, while the price to sales ratio stands at 8.1 times.
• The company's price to cash flow (P/CF) ratio stood at 41.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*
Sales per share (Unadj.)	Rs	216.9	231.3
TTM Earnings per share	Rs	41.3	42.5
Diluted earnings per share	Rs	40.3	41.7
Price to Cash Flow	x	46.3	41.2
TTM P/E ratio	x	49.5	44.7
Price / Book Value ratio	x	16.4	14.8
Market Cap	Rs m	151,231	144,752
Dividends per share (Unadj.)	Rs	27.0	28.0

Ratio Analysis for CRISIL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.6x during CY17, from 2.5x during CY16. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 1,058.6x during CY17, from 0.0x during CY16. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 31.0% during CY17, from 31.9% during CY17. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 44.2% during CY17, from 47.5% during CY16. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 20.9% during CY17, from 21.5% during CY16. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-16*	12 Dec-17*
Current ratio	x	2.5	1.6
Debtors’ Days	Days	489	573
Interest coverage	x	0.0	1,058.6
Debt to equity ratio	x	0.0	0.0
Return on assets	%	21.5	20.9
Return on equity	%	31.9	31.0
Return on capital employed	%	47.5	44.2

To see how CRISIL has performed over the last 5 years, please visit here.

CRISIL Share Price Performance

Over the last one year, CRISIL share price has moved up from Rs 1,800.2 to Rs 1,904.8, registering a gain of Rs 104.6 or around 5.8%.

Overall, the S&P BSE SENSEX is up 16.9% over the year.

(To know more, check out historical annual results for CRISIL and quarterly results for CRISIL)

Read: Latest Annual Report Analysis of CRISIL