CRISIL 2018-19 Annual Report Analysis

Tue, 31 Dec

CRISIL has announced its results for the year ended December 2019. Let us have a look at the detailed performance review of the company during FY18-19.

CRISIL Income Statement Analysis

• Operating income during the year fell 1.0% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 3.3% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 26.3% in CY19 as against 27.0% in CY18.
• Depreciation charges decreased by 13.9% and finance costs decreased by 89.7% YoY, respectively.
• Other income declined by 0.8% YoY.
• Net profit for the year declined by 5.3% YoY.
• Net profit margins during the year declined from 20.8% in CY18 to 19.9% in CY19.

CRISIL Income Statement 2018-19

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*	% Change
Net Sales	Rs m	17,485	17,317	-1.0%
Other income	Rs m	734	728	-0.8%
Total Revenues	Rs m	18,219	18,046	-1.0%
Gross profit	Rs m	4,712	4,558	-3.3%
Depreciation	Rs m	428	369	-13.9%
Interest	Rs m	22	2	-89.7%
Profit before tax	Rs m	4,996	4,916	-1.6%
Tax	Rs m	1,365	1,476	8.2%
Profit after tax	Rs m	3,631	3,440	-5.3%
Gross profit margin	%	27.0	26.3
Effective tax rate	%	27.3	30.0
Net profit margin	%	20.8	19.9

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CRISIL Balance Sheet Analysis

• The company's current liabilities during CY19 stood at Rs 6 billion as compared to Rs 5 billion in CY18, thereby witnessing an increase of 7.8%.
• Long-term debt down at Rs 0 million as compared to Rs 1 million during CY18, a fall of 50.0%.
• Current assets rose 19% and stood at Rs 10 billion, while fixed assets rose 2% and stood at Rs 19 billion in CY19.
• Overall, the total assets and liabilities for CY19 stood at Rs 29 billion as against Rs 27 billion during CY18, thereby witnessing a growth of 7%.

CRISIL Balance Sheet as on December 2019

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*	% Change
Networth	Rs m	10,687	11,052	3.4
Current Liabilities	Rs m	5,196	5,601	7.8
Long-term Debt	Rs m	1	0	-50.0
Total Liabilities	Rs m	27,250	29,198	7.1
Current assets	Rs m	8,686	10,312	18.7
Fixed Assets	Rs m	18,564	18,886	1.7
Total Assets	Rs m	27,250	29,198	7.1

CRISIL Cash Flow Statement Analysis

• CRISIL's cash flow from operating activities (CFO) during CY19 stood at Rs 4 billion, an improvement of 17.8% on a YoY basis.
• Cash flow from investing activities (CFI) during CY19 stood at Rs -710 million on a YoY basis.
• Cash flow from financial activities (CFF) during CY19 stood at Rs -2 billion on a YoY basis.
• Overall, net cash flows for the company during CY19 stood at Rs 1 billion from the Rs 1 billion net cash flows seen during CY18.

CRISIL Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-18	Dec-19
Cash Flow from Operating Activities	Rs m	3,785	4,459	17.8%
Cash Flow from Investing Activities	Rs m	-718	-710	-
Cash Flow from Financing Activities	Rs m	-2,032	-2,289	-
Net Cash Flow	Rs m	1,108	1,396	26.0%

Current Valuations for CRISIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 47.6, an decline from the EPS of Rs 50.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,910.3, stands at 40.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 12.6 times, while the price to sales ratio stands at 8.0 times.
• The company's price to cash flow (P/CF) ratio stood at 30.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*
Sales per share (Unadj.)	Rs	242.4	239.5
TTM Earnings per share	Rs	50.3	47.6
Diluted earnings per share	Rs	49.7	47.1
Price to Cash Flow	x	29.1	30.4
TTM P/E ratio	x	32.6	40.6
Price / Book Value ratio	x	11.1	10.5
Market Cap	Rs m	118,265	115,884
Dividends per share (Unadj.)	Rs	30.0	32.0

Ratio Analysis for CRISIL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 1.8x during CY19, from 1.7x during CY18. 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 2,138.3x during CY19, from 225.0x during CY18. 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 31.1% during CY19, from 34.0% during CY19. 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 44.5% during CY19, from 47.0% during CY18. 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 11.8% during CY19, from 13.4% during CY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-18*	12 Dec-19*
Current ratio	x	1.7	1.8
Debtors’ Days	Days	595	420
Interest coverage	x	225.0	2,138.3
Debt to equity ratio	x	0.0	0.0
Return on assets	%	13.4	11.8
Return on equity	%	34.0	31.1
Return on capital employed	%	47.0	44.5

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 1,878.9 to Rs 1,460.0, registering a loss of Rs 418.9 or around 22.3%.

Overall, the S&P BSE SENSEX is up 16.3% 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