ICRA: Good Growth! PPFAS

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ICRA: Good Growth!
Performance Highlights:
Consolidated top line of the rating and consulting major ICRALtd increased 33% Y-Y to ` 484Mn for the quarter ended
September 2010 as compared to ` 363.5Mn for the quarter ended September 2009. On a sequential basis too, the
company's revenues scaled up by 18% as compared to the June 2010 reported numbers.


Rating services reported a growth of 36% Y-Y to ` 335Mn for Sep'10 v/s ` 247Mn for Sep'09. This is attributable to the
rise in ratings of debt instruments and expansion of bank loan ratings, which was aptly supported by both corporate
and financial sector ratings. The company was also able to add new issuers/borrowers to its list of rating clients during
the first half of the current financial year.
Ratings contributed a major 69% of total revenues, consulting services contributed 12% and the rest was a mix of I.T.,
Outsourced and Professional services fees.
Other income for Q210 had included ` 20Mn, arising from reversal of diminishing in carrying value of investments. In
Q211 however, the value stands at a much lower ` 3Mn.
Bottom line for the company has growth in a healthy manner by 35% Y-Y from ` 107Mn in Q210 v/s ` 144Mn for Q211.
This was pushed by the effective tax rate moving down by 538 bps to 32.6% in the current reported quarter as against
38% for the corresponding quarter of last year.
Our Call:
We have marginally changed our estimates for FY11E after considering the reported half yearly numbers. At CMP of
` 1,443.9/- ICRAis trading at 23x FY11E earnings of ` 62/- We maintain our HOLD recommendation.