CRISIL 2017-18 Annual Report Analysis

Mon, 31 Dec

CRISIL has announced its results for the year ended December 2018. Let us have a look at the detailed performance review of the company during FY17-18.

CRISIL Income Statement Analysis

• Operating income during the year rose 5.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 3.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 27.0% in CY18 as against 27.5% in CY17.
• Depreciation charges decreased by 8.2% and finance costs increased by 443.9% YoY, respectively.
• Other income grew by 189.2% YoY.
• Net profit for the year grew by 19.3% YoY.
• Net profit margins during the year grew from 18.4% in CY17 to 20.8% in CY18.

CRISIL Income Statement 2017-18

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Net Sales	Rs m	16,585	17,485	5.4%
Other income	Rs m	254	734	189.2%
Total Revenues	Rs m	16,838	18,219	8.2%
Gross profit	Rs m	4,553	4,712	3.5%
Depreciation	Rs m	466	428	-8.2%
Interest	Rs m	4	22	443.9%
Profit before tax	Rs m	4,336	4,996	15.2%
Tax	Rs m	1,292	1,365	5.7%
Profit after tax	Rs m	3,044	3,631	19.3%
Gross profit margin	%	27.5	27.0
Effective tax rate	%	29.8	27.3
Net profit margin	%	18.4	20.8

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CRISIL Balance Sheet Analysis

• The company's current liabilities during CY18 stood at Rs 5 billion as compared to Rs 4 billion in CY17, thereby witnessing an increase of 21.2%.
• Long-term debt stood at Rs 1 million as compared to Rs 0 million during CY17, a fall of 0.0%.
• Current assets rose 23% and stood at Rs 9 billion, while fixed assets rose 146% and stood at Rs 19 billion in CY18.
• Overall, the total assets and liabilities for CY18 stood at Rs 27 billion as against Rs 15 billion during CY17, thereby witnessing a growth of 87%.

CRISIL Balance Sheet as on December 2018

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*	% Change
Networth	Rs m	9,814	10,687	8.9
Current Liabilities	Rs m	4,287	5,196	21.2
Long-term Debt	Rs m	0	1	0.0
Total Liabilities	Rs m	14,600	27,250	86.7
Current assets	Rs m	7,068	8,686	22.9
Fixed Assets	Rs m	7,532	18,564	146.5
Total Assets	Rs m	14,600	27,250	86.7

CRISIL Cash Flow Statement Analysis

• CRISIL's cash flow from operating activities (CFO) during CY18 stood at Rs 4 billion, an improvement of 30.2% on a YoY basis.
• Cash flow from investing activities (CFI) during CY18 stood at Rs -718 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY18 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during CY18 stood at Rs 1 billion from the Rs -752 million net cash flows seen during CY17.

CRISIL Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-17	Dec-18
Cash Flow from Operating Activities	Rs m	2,907	3,785	30.2%
Cash Flow from Investing Activities	Rs m	-1,767	-718	-
Cash Flow from Financing Activities	Rs m	-1,866	-2,032	-
Net Cash Flow	Rs m	-752	1,108	-

Current Valuations for CRISIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 50.3, an improvement from the EPS of Rs 42.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,619.0, stands at 32.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.1 times, while the price to sales ratio stands at 6.7 times.
• The company's price to cash flow (P/CF) ratio stood at 29.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Sales per share (Unadj.)	Rs	231.3	242.4
TTM Earnings per share	Rs	42.5	50.3
Diluted earnings per share	Rs	41.7	49.7
Price to Cash Flow	x	39.0	29.1
TTM P/E ratio	x	44.7	32.6
Price / Book Value ratio	x	14.8	11.1
Market Cap	Rs m	144,752	118,265
Dividends per share (Unadj.)	Rs	28.0	30.0

Ratio Analysis for CRISIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.7x during CY18, from 1.6x during CY17. 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 deteriorated and stood at 225.0x during CY18, from 1,058.6x during CY17. 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 improved and stood at 34.0% during CY18, from 31.0% during CY18. 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 improved and stood at 47.0% during CY18, from 44.2% during CY17. 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 13.4% during CY18, from 20.9% during CY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-17*	12 Dec-18*
Current ratio	x	1.6	1.7
Debtors’ Days	Days	573	595
Interest coverage	x	1,058.6	225.0
Debt to equity ratio	x	0.0	0.0
Return on assets	%	20.9	13.4
Return on equity	%	31.0	34.0
Return on capital employed	%	44.2	47.0

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 down from Rs 1,904.8 to Rs 1,878.9, registering a loss of Rs 25.9 or around 1.4%.

Overall, the S&P BSE SENSEX is up 12.1% 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