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Results
24-Jan-24
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Analysis
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ICRA
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Revenue growth improve, OP margins ease
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ICRA
has recorded 17% decline in the net profit to Rs 32.15 crore in the quarter
ended December 2023 (Q3FY2024). The revenues increased at healthy pace of
11.21% to Rs 114.59 crore. Sales of Rating, Research and other Service segment
has gone up 10.68% to Rs 65.95 crore (accounting for 57.51% of total sales).
Sales of Consulting Services segment has gone up 331.52% to Rs 4.82 crore
(accounting for 4.20% of total sales). Sales of knowledge segment has gone up
2.90% to Rs 39.42 crore (accounting for 34.38% of total sales). Sales of market
services segment has moved up 4.40% to Rs 4.48 crore (accounting for 3.90% of
total sales). Inter-segment sales came down from Rs 0.26 crore to Rs 0.08
crore.
Profit
before interest, tax and other unallocable items (PBIT) declined 17.37% to Rs
27.73 crore. PBIT of Rating, Research and other Service segment fell 22.25% to
Rs 11.97 crore (accounting for 43.19% of total PBIT). PBIT of knowledge segment
fell 5.96% to Rs 18.11 crore (accounting for 65.33% of total PBIT). PBIT of
market services reported profit of Rs 0.36 crore compared to loss of Rs 0.05
crore. However, the PBIT of consulting services segment was in loss at Rs 2.72
crore (accounting for -9.83% of total PBIT).
Operating
profit margin has declined from 35.17% to 26.40%, leading to 16.53% decline in
operating profit to Rs 30.25 crore. Employee cost increased from 51.82% to
58.44%. Other expenses rose from 12.99% to 15.16%.
Other
income rose 16.56% to Rs 17.17 crore. PBIDT fell 6.96% to Rs 47.42 crore.
Provision for interest jumped 630.77% to Rs 2.85 crore. PBDT fell 11.88% to Rs
44.57 crore. Provision for depreciation galloped 42.75% to Rs 3.84 crore.
Profit
before tax declined 14.95% to Rs 40.73 crore. Share of profit/loss were nil in
both the periods. Provision for tax was expense of Rs 8.32 crore, compared to
Rs 8.65 crore. Effective tax rate was 20.43% compared to 18.06%.
Minority
interest declined 27.78% to Rs 0.26 crore. Net profit attributable to owners of
the company fell 17.31% to Rs 32.15 crore.
Business highlights
The current quarter and nine
months financial include impact of amount provided towards a legal matter and
transaction costs related to acquisition of D2K Technologies India Private
Limited (D2K).
On the ratings front, ICRA
rated a few innovative structures backed by lease rentals and trade
receivables, and debt facility for the fixed income fund floated by an AIF that
would invest in asset-backed securities.
In Q3 FY2024, the bond
issuances fell on a higher base of the previous year. Securitisation volumes
moderated in Q3 FY2024 as higher risk weights to NBFCs, specifically on
unsecured loans led to investors (particularly banks) reassessing their
exposure. Going ahead, revised upward estimates of GDP growth augur well for
the credit market in terms of demand.
ICRA Analytics revenue
growth in Q3 FY2024 was driven by its Knowledge Service business and
consolidation of D2K from the current quarter. In the Market Data vertical, key
partnership arrangements were tied up with leading global data service
providers for providing valuation services. The D2K acquisition was completed
in the quarter and is expected to bring in synergies and drive growth in risk
and analytics business.
In the current year, ICRA
and ICRA Analytics entered into an agreement for share of common expenses.
Consequently, ICRA Ratings nine months period segmental margins include 1.9%
positive impact of such recharge, whereas ICRA Analytics segmental margins had an
adverse impact of 2.6%.
On the outreach front, in
Q3FY2024, ICRA remained proactive by issuing significant thematic reports on
key sectors and hosting impactful webinars featuring high-profile industry
panellists. These webinars, notably on medium & small scale NBFCs, Indian
state governments and credit quality trends, attracted a diverse audience,
including industry delegates, policy influencers, thought leaders, financial
institution representatives, and media professionals.
ICRA`s sectoral research and
viewpoints earned commendation across the industry. Notably, ICRA sector
experts were sought after as keynote speakers and panellists, participating in
11 prominent market and media conferences during the quarter, showcasing their
valued insights.
Commenting on the results,
Ramnath Krishnan, MD and Group CEO, ICRA, said: "ICRA`s ratings revenue
continued its growth momentum backed by the sequential rise in bond issuances
and bank credit, although the securitisation market recorded a contraction due
to tightened regulatory norms on unsecured loans by the NBFCs and expectations
of a fall in interest rates, which had led to postponement of issuances. We
expect issuances to pick up in the ongoing quarter with more clarity on the
regulatory impact and following the entry of new players in the market."
"We are delighted that
ICRA Analytics has acquired D2K, an established provider of software solutions
to banks and other financial institutions. The D2K acquisition will strengthen
our offerings in the risk and analytics vertical as we seek to expand and
diversify our revenue streams,” Mr Krishnan added.
Financial Performance
9MFY2024
The
revenues of the company have increased 9.52% to Rs 322.15 crore in 9MFY2024.
Sales of Rating, Research and other Service segment has gone up 11.38% to Rs
185.60 crore (accounting for 57.56% of total sales). Sales of Consulting
Services segment has moved up 108.02% to Rs 7.50 crore (accounting for 2.33% of
total sales). Sales of Knowledge Service segment has gone up 4.68% to Rs 116.00
crore (accounting for 35.98% of total sales). Sales of Market Service segment
declined 2.48% to Rs 13.34 crore (accounting for 4.14% of total sales).
Inter-segment sales came down from Rs 0.59 crore to Rs 0.29 crore.
Profit
before interest, tax and other unallocable items (PBIT) fell 6.17% to Rs 91.75
crore. PBIT of Rating, Research and other Service segment rose 4.39% to Rs
41.98 crore (accounting for 45.75% of total PBIT). PBIT of Knowledge Service
segment fell 7.07% to Rs 54.11 crore (accounting for 58.98% of total PBIT).
PBIT of Market Service segment fell 53.51% to Rs 0.81 crore (accounting for
0.88% of total PBIT). However, the PBIT of Consulting Services segment was in
loss at Rs -5.15 crore (accounting for -5.62% of total PBIT).
Operating
profit margin has declined from 35.65% to 30.71%, leading to 5.66% decline in
operating profit to Rs 98.93 crore. Employee cost increased from 51.88% to
55.91%. Other expenses rose from 12.47% to 13.38%.
Other
income rose 52.47% to Rs 51.29 crore. PBIDT increased 8.45% to Rs 150.22 crore.
Provision for interest jumped 222.22% to Rs 3.48 crore. PBDT rose 6.77% to Rs
146.74 crore. Provision for depreciation moved up 26.76% to Rs 9 crore.
Profit
before tax grew 5.69% to Rs 137.74 crore. Share of profit/loss were nil in both
the periods. Provision for tax was expense of Rs 32.55 crore, compared to Rs
32.24 crore. Effective tax rate was 23.63% compared to 24.74%.
Minority interest decreased
21.95% to Rs 0.96 crore. Net profit attributable to owners of the company
increased 7.61% to Rs 104.23 crore.
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ICRA: Consolidated
Results
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Sales
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114.59
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103.04
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11
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322.15
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294.15
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10
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403.23
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342.81
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18
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OPM %
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26.4
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35.2
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30.7
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35.7
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35.4
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35.2
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OP
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30.25
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36.24
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-17
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98.93
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104.88
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-6
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142.92
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120.57
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19
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Other Income
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17.17
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14.73
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17
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51.29
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33.64
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52
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49.55
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40.88
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21
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PBDIT
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47.42
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50.97
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-7
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150.22
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138.52
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8
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192.47
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161.45
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19
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Interest
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2.85
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0.39
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631
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3.48
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1.08
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222
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1.41
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1.56
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-10
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PBDT
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44.57
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50.58
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-12
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146.74
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137.44
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7
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191.06
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159.89
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19
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Depreciation
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3.84
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2.69
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43
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9.00
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7.10
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27
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9.83
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7.81
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26
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PBT
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40.73
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47.89
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-15
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137.74
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130.34
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6
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181.23
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152.08
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19
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Tax
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8.32
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8.65
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-4
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32.55
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32.25
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1
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44.50
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38.55
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15
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PAT
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32.41
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39.24
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-17
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105.19
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98.09
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7
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136.73
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113.53
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20
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Minority interest
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0.26
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0.36
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-28
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0.96
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1.23
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-22
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1.49
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1.24
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20
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Profit/Loss of
Associate Company
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0.00
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0.00
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-
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0.00
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0.00
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-
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0.00
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0.00
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-
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PAT
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32.15
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38.88
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-17
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104.23
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96.86
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8
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135.24
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112.29
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20
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EPS (Rs)*
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133.3
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161.2
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144.0
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133.8
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140.1
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116.4
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*EPS is annualized on
latest equity of Rs 9.65 crore, face value of Rs 10 each, Source: Capitaline
Corporate Database
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ICRA : Consolidated
Segment Results
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% of total
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2312 (3)
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2212 (3)
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Var. (%)
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% of total
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2309 (9)
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2209 (9)
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Var. (%)
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% of total
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2303 (12)
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2203 (12)
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Var. (%)
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Segment Revenue
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Rating,Research and
other Service
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57.5
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65.95
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59.59
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11
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57.6
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185.60
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166.64
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11
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56.9
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230.00
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202.52
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14
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Consulting Services
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4.2
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4.82
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1.12
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330
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2.3
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7.50
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3.61
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108
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1.4
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5.74
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6.22
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-8
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Knowledge services
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34.4
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39.42
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38.31
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3
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36.0
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116.00
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110.82
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5
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37.1
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150.12
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117.74
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28
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Market services
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3.9
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4.48
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4.29
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4
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4.1
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13.34
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13.68
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4.5
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18.26
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17.11
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Total Reported Sales
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100.0
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114.67
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103.30
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11
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100.0
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322.44
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294.74
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9
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100.0
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404.12
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343.59
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18
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Less: Inter segment
revenues
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0.08
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0.26
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0.29
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0.59
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0.89
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0.79
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Net Sales
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100.00
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114.59
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103.04
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11
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100.00
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322.15
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294.15
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10
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100.00
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403.23
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342.81
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18
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PBIT
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Rating,Research and
other Service
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43.2
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11.97
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15.40
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-22
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45.8
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41.98
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40.21
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4
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44.0
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58.61
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52.06
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13
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Consulting Services
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-9.8
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-2.72
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-1.06
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157
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-5.6
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-5.15
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-2.40
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115
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-1.7
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-2.32
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-3.12
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-26
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Knowledge services
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65.3
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18.11
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19.26
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-6
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59.0
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54.11
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58.23
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-7
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56.2
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74.79
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60.27
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24
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Market services
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1.3
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0.36
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-0.05
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0.9
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0.81
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1.74
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1.5
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2.00
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3.55
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Total PBIT
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100.0
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27.73
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33.55
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-17
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100.0
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91.75
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97.79
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-6
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100.0
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133.09
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112.76
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18
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Less : Interest
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2.85
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0.39
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631
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3.48
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1.08
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222
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1.41
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1.56
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-10
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Add: Other
un-allcoable
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15.85
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14.73
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8
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49.46
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33.64
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47
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49.54
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40.89
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21
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Profit Before Tax
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40.73
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47.89
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-15
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137.74
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130.34
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6
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181.23
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152.09
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19
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Figures in Rs crore,
PL: Profit to Loss, LP: Loss to Profit
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Source: Capitaline
Corporate Database
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