CRISIL - Strong operating performance; upgrade to BUY:Emkay,

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CRISIL

Strong operating performance; upgrade to BUY

BUY

CMP: Rs839                                        Target Price: Rs1050

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n     CRISIL’s Q3CY11 revenue came in at Rs2.1bn, inline with expectation. However net profit at Rs602mn was ahead of expectation led by lower opex and one off gains of Rs104mn

n     While rating revenues remain stable qoq, Research business continues to show strong growth (7.8%qoq). Continued momentum in IREVNA & leverage on pipal bus to drive rev

n     Operating margins expanded by 63bps qoq to 35% led by 165/ 41bps yoy improvement in rating and research margins

n     Shifting our valuation methodology from premium to Sensex valuations to cash flow discounting. Accordingly, revising price target to Rs1050 and upgrade to BUY