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CRISIL
Performance Highlights
Particulars (` cr) Net sales EBITDA EBITDA margin (%) Net profit 1QCY2012 1QCY2011 229.7 82.2 35.8 57.0 178.8 58.3 32.6 46.0 %chg (yoy) 4QCY2011 28.5 41.0 317bp 23.9 224.6 80.0 35.6 55.8 %chg (qoq) 2.3 2.8 18bp 2.0
NEUTRAL
CMP Target Price
Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Credit Rating 7,491 0.6 1150/648 16,717 1 17,151 5,226 CRSL.BO CRISIL@IN
`1,069 12 Months
For 1QCY2012, CRISILs net sales grew by 28.5% yoy to `230cr. The company reported a 317bp yoy expansion in OPM to 35.8%. Net profit increased by 23.9% yoy to `57cr. We continue to remain Neutral on the stock. Top line posts strong growth, EBITDA margin expands: For 1QCY2012, CRISILs top line reported 28.5% yoy growth to `230cr, led by strong growth in its rating segment, which witnessed 40.1% growth backed by strong growth in the bank loan rating segment. The company rated nearly 1,100 entities during 1QCY2012 vs. 2,700 entities in CY2011. The research segment continued its strong growth during the quarter, registering 22.9% yoy growth. The advisory segment also witnessed an increase in its revenue, registering 18.9% yoy growth. The companys EBITDA margin expanded by 317bp yoy, largely due to lower staff cost, which declined to 40.6% of sales in 1QCY2012 from 43.7% of sales in 1QCY2011. Net profit came in at `57cr, up 23.9% yoy; while margin contracted by 92bp yoy to 24.8%, largely due to increased tax rate. CRISILs tax rate increased to 28.1% of PBT in 1QCY2012 vs. only 15.1% of PBT in 1QCY2011. Outlook and valuation: We expect CRISIL to post a 17.2% CAGR in revenue and 16.5% CAGR in PAT over CY2011-13 and continue to maintain its leadership position. Despite the recent buy back, the stock is available at rich valuation of 26.7x CY2013E earnings, which is at the higher end of its historical range of 16.4x-29.9x and five-year median of 22x one-year forward EPS. We continue to maintain our Neutral recommendation on the stock.
Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 53.1 16.6 11.1 19.2
3m 6.2 16.4
CY2010 631 17.5 160 (0.2) 29.0 34.5 36.9 49.6 47.4 19.2 11.6 33.7
CY2011 827 31.1 206 28.6 29.5 34.2 36.3 51.1 62.6 18.1 8.7 25.6
CY2012E 982 18.7 241 16.5 34.3 34.3 31.1 50.9 64.6 14.1 7.2 21.0
CY2013E 1,136 15.8 280 16.4 40.0 34.3 26.7 46.9 59.8 11.3 6.1 17.7
Sharan Lillaney
022-3935 7800 Ext: 6811 sharanb.lillaney@angelbroking.com
1QCY2012 229.7 147.5 82.2 35.8 7.8 74.4 4.8 79.2 22.2 57.0 24.8 52.2 8.1
1QCY2011 178.8 120.4 58.3 32.6 6.8 51.5 2.6 54.2 8.2 46.0 25.7 43.4 6.5
%chg (yoy) 28.5 22.5 41.0 317bp 15.4 44.4 81.8 46.2 171.4 23.9 (92)bp 20.4 25.5
4QCY2011 224.6 144.6 80.0 35.6 8.3 71.7 9.1 80.8 24.9 55.8 24.9 46.8 8.0
%chg (qoq) 2.3 2.0 2.8 18bp (5.3) 3.7 (47.2) (2.0) 2.0 (6.4)bp 11.6 2.0
CY2011 827.2 544.5 282.7 34.2 29.8 252.9 22.6 275.5 69.1 206.4 25.0 183.8 29.5
CY2010 631.1 413.3 217.7 34.5 21.3 196.5 70.4 266.9 58.7 (2.7) 205.5 32.6 135.0 29.0
%chg (yoy) 31.1 31.7 29.9 (32)bp 40.3 28.7 (67.9) 3.2 0.5 (761)bp 36.1 1.8
(%) 45 220 225 230 40 35 30 25 20 15 10 5 0 3QCY2011 4QCY2011 1QCY2012 Growth (qoq) Growth (yoy)
204 179
40
35
32.6 29.7
30
Key ratios
Y/E Dec. Valuation Ratio (x) P/E (on FDEPS) P/E (on basic, reported EPS) P/CEPS P/BV Dividend yield (%) Market cap. / Sales EV/Sales EV/EBITDA EV / Total Assets Per Share Data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis (%) EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Asset Turnover (Net Block) Asset Turnover (Total Assets) Operating Income / Invested Capital Inventory / Sales (days) Receivables (days) Payables (days) Working capital cycle (ex-cash) (days) Solvency ratios (x) Gross debt to equity Net debt to equity Net debt to EBITDA Interest Coverage (EBIT / Interest) 2.9 4.4 1.4 4.0 58 122 (21) 2.6 3.7 1.5 3.5 58 120 (19) 2.5 3.7 2.0 4.8 43 110 (29) 2.8 4.6 2.1 7.8 36 112 (38) 3.2 6.0 1.9 12.7 37 109 (36) 46.6 183.6 40.6 47.4 130.2 49.6 62.6 145.9 51.1 64.6 243.2 50.9 59.8 400.6 46.9 34.3 77.5 4.0 106.4 106.4 31.1 77.8 3.5 83.6 83.6 30.6 74.9 4.8 109.3 109.3 31.1 74.0 7.8 179.9 179.9 31.5 74.0 12.7 296.4 296.4 22.3 22.3 24.3 10.0 60.0 29.0 29.0 31.9 20.0 55.6 29.5 29.5 33.7 11.0 59.0 34.3 34.3 38.8 15.0 75.8 40.0 40.0 44.6 18.0 94.8 48.0 48.0 44.0 17.8 0.9 13.9 13.6 36.8 16.9 36.9 36.9 33.5 19.2 1.9 11.9 11.6 33.7 18.6 36.3 36.3 31.7 18.1 1.0 9.1 8.7 25.6 17.5 31.1 31.1 27.5 14.1 1.4 7.6 7.2 21.0 13.3 26.7 26.7 24.0 11.3 1.7 6.6 6.1 17.7 10.4 FY2009 CY2010 CY2011 CY2012E CY2013E
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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered
CRISIL No No No No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Returns):