Capitaline

Results 18-Feb-23

Analysis

CRISIL

Continues steady show

Crisil has recorded 16% increase in the consolidated income from operations for the quarter ended December 2022 to Rs 822.26 crore, compared with Rs 706.02 crore in the corresponding quarter of 2021. Consolidated total income for the quarter ended December 2022, was up 17% to Rs 840.64 crore, compared with Rs 719.45 crore in the corresponding quarter of the previous year. Sales of Research Services segment surged 19% to Rs 645.06 crore (accounting for 78% of total sales). Sales of Rating Services segment increased 9% to Rs 177.20 crore (accounting for 22% of total sales).

Operating profit margin has eased to 26.3% in Q4CY2022 from 27.3% in Q4CY2021. The operating profit increased 12% to Rs 216.18 crore. Employee cost increased 13%, professional fees 12%, travel 247%, other expenses 90% and depreciation 6%, while associate service fees declined 7% and finance cost 27%.

Other income surged 37% to Rs 18.38 crore. Profit before tax grew 15% to Rs 207.0 crore. Share of profit/loss were nil in both the periods. EO was nil in Q4CY22 compared with Rs 45.82 crore in Q4CY21. PBT after EO, declined 8% to Rs 207.0 crore in Q4CY22.

Provision for tax was expense of Rs 48.98 crore, compared to Rs 56.66 crore. Effective tax rate was 23.7% compared to 25.1%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company fell 6% to Rs 158.02 crore.

Profit after tax (excluding impact of exceptional item) was up 17.5% to Rs 158.0 crore in Q4CY2022, compared with Rs 134.5 crore in the corresponding quarter of the previous year.

The Board of Directors has declared an final dividend of Rs 23 per share (of Re 1 face value) for CY2022. The total dividend for the year works out to Rs 48 per share.

Says Amish Mehta, Managing Director & CEO, CRISIL, “Global economic activity held up well in the December quarter with inflation showing signs of peaking. We saw growth across businesses. The looming slowdown in the global economy, particularly in the US and Europe, is expected to manifest next fiscal, as will the effect of the raft of rate hikes because monetary policy impacts with a lag. India’s growth cycles are quite synchronized with advanced economies now. We remain committed to making an impact through investments in technology and talent for creating new products and solutions.”

Other updates

Overall bank credit continued to grow owing to traction in the large corporate, micro, small and medium enterprises, and retail segments. Corporate bond issuances recovered in the quarter after a sluggish run. CRISIL Ratings saw momentum in bank loan ratings. Overall revenue was up 9.1% on-year in the quarter, and 13.0% in 2022.

Global Analytical Center (GAC) continued to drive surveillance support across the analytical practices of S&P Ratings, and partnered on data and technology transformation programs.

The Ratings segment grew 9.3% in the quarter and 12.0% for CY2022.

The Global Research & Risk Solutions (GR&RS) business saw increasing demand across service lines as sales and trading activity remained robust despite market volatility. There was good traction in sustainability and risk solutions.

The Market Insights & Analytics (MI&A) business saw continued traction for its proprietary credit risk solution and demand for research and consulting services.

Global Benchmarking Analytics saw momentum in corporate and investment banking (CIB) driven by enhanced client engagement.

The research, analytics and solutions segment grew 18.6% in the quarter and 23.2% in CY2022.

The ramp-up of digital and foundational infrastructure continues, with sharp focus on cloud quotient and information security.

Consolidated Performance – CY2022

The consolidated income from operations of CRISIL rose 20.3% to Rs 2768.7 crore in CY2022, compared with Rs 2300.7 crore in CY2021. Consolidated total income was up 22.1% to Rs 2907.8 crore compared with Rs 2382.4 crore. Profit before exceptional items and tax increased 29.6% to Rs 742.4 crore compared with Rs 572.6 crore in CY2021. Profit after tax (excluding impact of exceptional item) increased 30.7% to Rs 564.4 crore in CY2022 from Rs 431.7 crore in CY2021. Profit before tax includes exceptional income of Rs 45.8 crore towards profit on sale of property.

Sharp movement in the US dollar versus the Rupee and the British pound supported profitability in CY2022, which includes Rs 30.1 crore from revaluation of subsidiary loan. The fourth quarter saw appreciation in the British pound versus US dollar, resulting in an adverse impact (including Rs 5.3 crore loss from revaluation of subsidiary loan).

Crisil : Consolidated Results
	2212 (3)	2112 (3)	Var. (%)	2212 (12)	2112 (12)	Var. (%)
Income from Operations	822.26	706.02	16	2768.72	2300.69	20
OPM (%)	26.29	27.27		25.75	26.33
OP	216.18	192.52	12	713.07	605.84	18
Other income	18.38	13.43	37	139.04	81.69	70
PBIDT	234.56	205.95	14	852.11	687.53	24
Interest	1.35	1.85	-27	6.40	8.93	-28
PBDT	233.21	204.10	14	845.71	678.60	25
Depreciation	26.21	24.63	6	103.31	105.98	-3
PBT	207.00	179.47	15	742.40	572.62	30
Share in profit/loss of associates	0.00	0.00	-	0.00	0.00	-
PBT before EO	207.00	179.47	15	742.40	572.62	30
EO	0.00	45.82	-100	0.00	45.82	-100
PBT after EO	207.00	225.29	-8	742.40	618.44	20
Tax	48.98	56.66	-14	178.01	152.63	17
PAT before MI	158.02	168.63	-6	564.39	465.81	21
Minority Interest	0.00	0.00	-	0.00	0.00	-
PAT after MI	158.02	168.63	-6	564.39	465.81	21
EPS (Rs)*	#	#		77.2	59.0
* Annualised on current equity of Rs 7.31 crore. Face Value: Rs 1 each
*EPS is calculated after excluding EO items
#EPS not annualised due to seasonality of business
EO: Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Crisil : Consolidated Segment Results
	% of total	2212 (3)	2112 (3)	Var. (%)	% of total	2112 (12)	2112 (12)	Var. (%)
Segment Revenue
Rating Services	21.6	177.20	162.10	9	24.0	663.43	592.41	12
Research, Analytics and Solutions	78.4	645.06	543.92	19	76.0	2105.29	1708.28	23
Advisory Services	0.0	0.00	0.00	-	0.0			-
Total Sales	100.0	822.26	706.02	16	100.0	2768.72	2300.69	20
Less:- Inter Segment Revenue		0.00	0.00			0.00	0.00
Net Sales/Income from operation	100.00	822.26	706.02	16	100.0	2768.72	2300.69	20

Segment Result (PBIDT)
Rating Services	33.1	71.16	66.45	7	37.9	278.59	253.78	10
Research Services	66.9	144.04	115.85	24	62.1	457.08	339.60	35
Advisory Services	0.0	0.00	0.00	-	0.0			-
Total	100.0	215.20	182.30	18	100.0	735.67	593.38	24
Add: Unallocable Income net of unallocable Expenses		4.55	9.93	-54		57.15	30.82	85
Less: Depreciation		12.75	12.76	0		50.42	51.58	-2
Add: Unallocable Income net of unallocable Expenses		0.00	0.00	-		0.00	0.00	-
Profit Before Tax		207.00	179.47	15		742.40	572.62	30
Figures in Rs crore, PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

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