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CRISIL 2019-20 Annual Report Analysis

Thu, 31 Dec

CRISIL has announced its results for the year ended December 2020. Let us have a look at the detailed performance review of the company during FY19-20.

CRISIL Income Statement Analysis

• Operating income during the year rose 14.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 12.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 25.8% in CY20 as against 26.3% in CY19.
• Depreciation charges increased by 228.6% and finance costs increased by 6156.5% YoY, respectively.
• Other income grew by 14.2% YoY.
• Net profit for the year grew by 3.1% YoY.
• Net profit margins during the year declined from 19.9% in CY19 to 17.9% in CY20.

CRISIL Income Statement 2019-20

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Net Sales	Rs m	17,317	19,818	14.4%
Other income	Rs m	728	832	14.2%
Total Revenues	Rs m	18,046	20,650	14.4%
Gross profit	Rs m	4,558	5,106	12.0%
Depreciation	Rs m	369	1,211	228.6%
Interest	Rs m	2	144	6,156.5%
Profit before tax	Rs m	4,916	4,583	-6.8%
Tax	Rs m	1,476	1,036	-29.9%
Profit after tax	Rs m	3,440	3,547	3.1%
Gross profit margin	%	26.3	25.8
Effective tax rate	%	30.0	22.6
Net profit margin	%	19.9	17.9

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CRISIL Balance Sheet Analysis

• The company's current liabilities during CY20 stood at Rs 8 billion as compared to Rs 6 billion in CY19, thereby witnessing an increase of 47.8%.
• Current assets rose 19% and stood at Rs 12 billion, while fixed assets rose 23% and stood at Rs 23 billion in CY20.
• Overall, the total assets and liabilities for CY20 stood at Rs 35 billion as against Rs 29 billion during CY19, thereby witnessing a growth of 21%.

CRISIL Balance Sheet as on December 2020

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*	% Change
Networth	Rs m	11,052	12,570	13.7
Current Liabilities	Rs m	5,601	8,280	47.8
Long-term Debt	Rs m	0	0	-100.0
Total Liabilities	Rs m	29,198	35,436	21.4
Current assets	Rs m	10,312	12,235	18.6
Fixed Assets	Rs m	18,886	23,201	22.8
Total Assets	Rs m	29,198	35,436	21.4

CRISIL Cash Flow Statement Analysis

• CRISIL's cash flow from operating activities (CFO) during CY20 stood at Rs 5 billion, an improvement of 12.2% on a YoY basis.
• Cash flow from investing activities (CFI) during CY20 stood at Rs -3 billion, an improvement of 354.9% on a YoY basis.
• Cash flow from financial activities (CFF) during CY20 stood at Rs -3 billion on a YoY basis.
• Overall, net cash flows for the company during CY20 stood at Rs -642 million from the Rs 1 billion net cash flows seen during CY19.

CRISIL Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Dec-19	Dec-20
Cash Flow from Operating Activities	Rs m	4,459	5,005	12.2%
Cash Flow from Investing Activities	Rs m	-710	-3,229	-
Cash Flow from Financing Activities	Rs m	-2,289	-2,651	-
Net Cash Flow	Rs m	1,396	-642	-

Current Valuations for CRISIL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 48.9, an improvement from the EPS of Rs 47.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,922.9, stands at 39.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 11.2 times, while the price to sales ratio stands at 7.0 times.
• The company's price to cash flow (P/CF) ratio stood at 24.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Sales per share (Unadj.)	Rs	239.5	273.0
TTM Earnings per share	Rs	47.6	48.9
Diluted earnings per share	Rs	47.1	48.6
Price to Cash Flow	x	36.6	24.5
TTM P/E ratio	x	40.6	39.6
Price / Book Value ratio	x	10.5	9.3
Market Cap	Rs m	115,884	116,458
Dividends per share (Unadj.)	Rs	32.0	33.0

Ratio Analysis for CRISIL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.5x during CY20, from 1.8x during CY19. 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 32.8x during CY20, from 2,138.3x during CY19. 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 28.2% during CY20, from 31.1% during CY20. 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 37.6% during CY20, from 44.5% during CY19. 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 10.4% during CY20, from 11.8% during CY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Dec-19*	12 Dec-20*
Current ratio	x	1.8	1.5
Debtors’ Days	Days	420	566
Interest coverage	x	2,138.3	32.8
Debt to equity ratio	x	0.0	0.0
Return on assets	%	11.8	10.4
Return on equity	%	31.1	28.2
Return on capital employed	%	44.5	37.6

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 1,460.0 to Rs 1,255.0, registering a loss of Rs 205.0 or around 14.0%.

Overall, the S&P BSE SENSEX is down 24.2% 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