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¾ CRISIL’s Q4CY11 revenue came in at Rs2.2bn, inline with
expectation. However net profit at Rs498mn was slightly
below expectation led by higher opex
¾ Research continues to grow at a strong pace at 34%yoy,
while rating grew by a moderate 14%yoy. Continued
momentum in IREVNA & leverage on pipal bus to drive
research rev further
¾ Op margins contracted by 149bps qoq to 33.5% led by 313/
117 bps contraction in rating and research margins.
Resultantly op profit grew by 3.9%yoy, slightly below exp
¾ Strong cash flow generation capabilities of the company
should continue to support the expensive valuations.
Maintain BUY rating on the stock with PT of Rs1,050
Revenue growth inline with expectation
CRISIL Q4CY11 revenue at Rs2.2bn (up 26.1% yoy and 4.7% qoq) was inline with our
expectation. This growth in revenue was led by 34% yoy (4.9% qoq) growth in research
and information services segment and 14.1%yoy growth in rating revenues. Advisory
services at Rs162mn were up 7% yoy .
Pick up in debt issuances to aid growth in rating revenues in CY12
Rating revenues grew at a moderate pace in CY11 led by lower debt activity on account
of highly volatile interest rate environment. However with interest rate cycle peaking out,
debt issuances are likely to increase in CY12, hence aiding growth in rating revenues.
Debt issuance has already improved in September and December quarter with 28-
30%yoy growth in volumes. Moreover with continued traction in IREVNA and Pipal
research, growth in research is also likely to remain strong in CY12 as well.
Resultantly, net profit also came slightly below expectation
The company reported a 10.4%yoy growth in reported net profit to Rs558mn, inline with
expectation. However this includes one time profit of Rs71.3mn on account of forex gains
and Rs15.8mn on account of sale of office space. Adjusted for the above one off items the
net profit declined by 2.8%yoy to Rs498mn, slightly below expectation.
Completes Buyback worth Rs795mn
CRISIL completed its buyback of 0.9mn shares at an average price of 871 in December
2011, totaling to Rs795mn. Resultantly the equity capital came down from Rs70.9mn to
70.1mn. CRISIL completed its previous buy back between Nov 3-10, 2010 of 128,156
(1,281,560 post split) shares at an average price of Rs6,200 (Rs620 post split), totalling to
Rs795mn. The frequent buyback’s resembles strong operating cash flow position of the
company. The average operating cash flow over the last four years stood at a strong
Rs2.8bn.
ESOP’s issuance upto 0.9mn shares, 1.3% of Equity
CRISIL’s Board of Directors at its meeting held on February 17, 2012, approved the
proposal to issue options to be converted into equity shares not exceeding 9,25,000 equity
shares which is 1.32% of the issued and paid-up equity share capital of the Company to the
employees and whole-time directors of the Company and its subsidiary companies, subject
to the approval of the members of the Company by postal ballot mechanism. We have not
factored this in our numbers for CY12/13.
Valuation and view
While at 27x CY12E EPS the valuations look quite expensive, we believe that the strong
cash flow generation capabilities of the company should continue to support the expensive
valuations. We maintain our BUY rating on the stock with price target of Rs1,050.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
¾ CRISIL’s Q4CY11 revenue came in at Rs2.2bn, inline with
expectation. However net profit at Rs498mn was slightly
below expectation led by higher opex
¾ Research continues to grow at a strong pace at 34%yoy,
while rating grew by a moderate 14%yoy. Continued
momentum in IREVNA & leverage on pipal bus to drive
research rev further
¾ Op margins contracted by 149bps qoq to 33.5% led by 313/
117 bps contraction in rating and research margins.
Resultantly op profit grew by 3.9%yoy, slightly below exp
¾ Strong cash flow generation capabilities of the company
should continue to support the expensive valuations.
Maintain BUY rating on the stock with PT of Rs1,050
Revenue growth inline with expectation
CRISIL Q4CY11 revenue at Rs2.2bn (up 26.1% yoy and 4.7% qoq) was inline with our
expectation. This growth in revenue was led by 34% yoy (4.9% qoq) growth in research
and information services segment and 14.1%yoy growth in rating revenues. Advisory
services at Rs162mn were up 7% yoy .
Pick up in debt issuances to aid growth in rating revenues in CY12
Rating revenues grew at a moderate pace in CY11 led by lower debt activity on account
of highly volatile interest rate environment. However with interest rate cycle peaking out,
debt issuances are likely to increase in CY12, hence aiding growth in rating revenues.
Debt issuance has already improved in September and December quarter with 28-
30%yoy growth in volumes. Moreover with continued traction in IREVNA and Pipal
research, growth in research is also likely to remain strong in CY12 as well.
Resultantly, net profit also came slightly below expectation
The company reported a 10.4%yoy growth in reported net profit to Rs558mn, inline with
expectation. However this includes one time profit of Rs71.3mn on account of forex gains
and Rs15.8mn on account of sale of office space. Adjusted for the above one off items the
net profit declined by 2.8%yoy to Rs498mn, slightly below expectation.
Completes Buyback worth Rs795mn
CRISIL completed its buyback of 0.9mn shares at an average price of 871 in December
2011, totaling to Rs795mn. Resultantly the equity capital came down from Rs70.9mn to
70.1mn. CRISIL completed its previous buy back between Nov 3-10, 2010 of 128,156
(1,281,560 post split) shares at an average price of Rs6,200 (Rs620 post split), totalling to
Rs795mn. The frequent buyback’s resembles strong operating cash flow position of the
company. The average operating cash flow over the last four years stood at a strong
Rs2.8bn.
ESOP’s issuance upto 0.9mn shares, 1.3% of Equity
CRISIL’s Board of Directors at its meeting held on February 17, 2012, approved the
proposal to issue options to be converted into equity shares not exceeding 9,25,000 equity
shares which is 1.32% of the issued and paid-up equity share capital of the Company to the
employees and whole-time directors of the Company and its subsidiary companies, subject
to the approval of the members of the Company by postal ballot mechanism. We have not
factored this in our numbers for CY12/13.
Valuation and view
While at 27x CY12E EPS the valuations look quite expensive, we believe that the strong
cash flow generation capabilities of the company should continue to support the expensive
valuations. We maintain our BUY rating on the stock with price target of Rs1,050.
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