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Ÿ Good operating performance for the quarter & year ended December 2011
Ÿ IREVNA & Pipal Research report sustained growth
Ÿ Rating business was supported by BLR & SME ratings as bond issuances remain sluggish due to high
interest rates & liquidity constraints
Ÿ Margins have taken a hit on account of rising staff & other expenses
CRISIL Limited has reported a good set of numbers for the quarter ended December 2011. The company clocked a
3% Q-Q & 23% Y-Y growth in its consolidated total income to `2,175Mn from ` 2,111Mn in September 2011 &
`1,774Mn in December 2011 respectively. Growth in the current quarter is on the back of sustained performance of the
Research (Irevna, Pipal), Ratings and Advisory businesses.
Income from the rating services have increased by 14% Y-Y to ` 851Mn for the quarter ended Dec’11 as against
`746Mn for the quarter ended Dec’10. Over the past few quarters growth in this segment has remained slow due to
less contribution from the high margin bond business. On the positive side, bank loan ratings (BLR) and SME ratings
continue to show momentum.
Research segment delivered an excellent performance for Dec'11, by reporting a 34% Y-Y growth to `1,163Mn v/s
`868Mn for the corresponding quarter of last year. IREVNA & the Pipal acquisition are adding great momentum to the
research division (contributing almost half of the company's revenues) & also compensating for the slow growth in
CRISIL's ratings business.
For the current quarter, operating profit was marginally up by 4% Y-Y to ` 728Mn v/s ` 702Mn for Q4CY10. Growth was
affected due to higher personnel costs (up 535bps) & other expeneses (up 132bps). This has pulled down the
operating margins by 610bps to 34% (40%; Dec'10).
Reported bottom line for the quarter ended Dec'11 shows a growth of 10% to ` 558Mn (this include gains from sale of
assets) as compared to ` 506Mn for the corresponding quarter of last year. Adjusting for the said one-time gains, PAT
for Q4CY11 shows a de-growth of 8% to ` 471Mn as against ` 514Mn for Q4CY10.
Year end performance brief: CY11 v/s CY10
Ÿ Total consolidated income up by 28%
Ÿ Research business continued to lead with a 45% growth, ratings & advisory businesses post a growth of 15% &
11% respectively
Ÿ OPM at 33% v/s 35%, down 234bps due to higher opex
Ÿ Reported PAT (including one off Forex gain & profits from sale of assets) shows a rise of 0.5%. Adjusting for the
same, net profit has increased by 19%
Recent Developments:
Ÿ CRISIL completed its buyback of 0.9Mn shares at an average price of ` 871/- per share totaling to ` 795Mn
Ÿ ESOP's issued to the tune of 0.9Mn shares, 1.32% of equity
Our Call:
At CMP of ` 938.5/-, CRISIL is quoting at 32.2x TTM reported earnings of ` 29.2/- per share. Currently the valuations
look expensive but, going ahead we believe strong & sustainable growth in the company's Research business with
added traction from the Ratings segment will propel it to attractive valuations. We maintain our 'HOLD'
recommendation on the scrip.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ÿ Good operating performance for the quarter & year ended December 2011
Ÿ IREVNA & Pipal Research report sustained growth
Ÿ Rating business was supported by BLR & SME ratings as bond issuances remain sluggish due to high
interest rates & liquidity constraints
Ÿ Margins have taken a hit on account of rising staff & other expenses
CRISIL Limited has reported a good set of numbers for the quarter ended December 2011. The company clocked a
3% Q-Q & 23% Y-Y growth in its consolidated total income to `2,175Mn from ` 2,111Mn in September 2011 &
`1,774Mn in December 2011 respectively. Growth in the current quarter is on the back of sustained performance of the
Research (Irevna, Pipal), Ratings and Advisory businesses.
Income from the rating services have increased by 14% Y-Y to ` 851Mn for the quarter ended Dec’11 as against
`746Mn for the quarter ended Dec’10. Over the past few quarters growth in this segment has remained slow due to
less contribution from the high margin bond business. On the positive side, bank loan ratings (BLR) and SME ratings
continue to show momentum.
Research segment delivered an excellent performance for Dec'11, by reporting a 34% Y-Y growth to `1,163Mn v/s
`868Mn for the corresponding quarter of last year. IREVNA & the Pipal acquisition are adding great momentum to the
research division (contributing almost half of the company's revenues) & also compensating for the slow growth in
CRISIL's ratings business.
For the current quarter, operating profit was marginally up by 4% Y-Y to ` 728Mn v/s ` 702Mn for Q4CY10. Growth was
affected due to higher personnel costs (up 535bps) & other expeneses (up 132bps). This has pulled down the
operating margins by 610bps to 34% (40%; Dec'10).
Reported bottom line for the quarter ended Dec'11 shows a growth of 10% to ` 558Mn (this include gains from sale of
assets) as compared to ` 506Mn for the corresponding quarter of last year. Adjusting for the said one-time gains, PAT
for Q4CY11 shows a de-growth of 8% to ` 471Mn as against ` 514Mn for Q4CY10.
Year end performance brief: CY11 v/s CY10
Ÿ Total consolidated income up by 28%
Ÿ Research business continued to lead with a 45% growth, ratings & advisory businesses post a growth of 15% &
11% respectively
Ÿ OPM at 33% v/s 35%, down 234bps due to higher opex
Ÿ Reported PAT (including one off Forex gain & profits from sale of assets) shows a rise of 0.5%. Adjusting for the
same, net profit has increased by 19%
Recent Developments:
Ÿ CRISIL completed its buyback of 0.9Mn shares at an average price of ` 871/- per share totaling to ` 795Mn
Ÿ ESOP's issued to the tune of 0.9Mn shares, 1.32% of equity
Our Call:
At CMP of ` 938.5/-, CRISIL is quoting at 32.2x TTM reported earnings of ` 29.2/- per share. Currently the valuations
look expensive but, going ahead we believe strong & sustainable growth in the company's Research business with
added traction from the Ratings segment will propel it to attractive valuations. We maintain our 'HOLD'
recommendation on the scrip.
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