Crisil Ltd
India’s largest rating agency and 67.8% subsidiary of Standard & Poor’s, CRISIL, following calendar year for financial reporting, posted third quarter consolidated revenue of Rs. 286 crore, up 8% QoQ, resulting in 17% QoQ higher EBITDA of Rs. 111 crore (EBITDA margin of 39%, 36% in Q2CY13 and CY12). The company, providing ratings, research and advisory services, saw a dull quarter in terms of ratings business – both bonds and equities, which is its most profitable vertical clocking approximately 40% operating margins. The risk and infrastructure solutions as well as analytics vertical, supporting the foreign parent, however, saw good business traction from global corporate and structured finance domains, which saved the day. Declining staff costs, its main expense component, to 45% of revenue in Q3, from Q2’s 50%, helped strengthen margins.
Additionally, sale of company’s entire 49% stake in India Index Services to JV partner NSE for Rs. 100 crore resulted in exceptional gains of Rs. 66 crore during Q3, which augmented Q3 and 9mCY13 PAT to Rs. 117 crore and Rs. 227 crore respectively. Excluding the exceptional gains, Q3 PAT would be close to Rs. 73 crore, 22% higher QoQ. Company which had paid Rs. 16 dividend in CY12, has declared third interim dividend of Rs. 3 per share (FV Re. 1 each), taking this year’s dividend to Rs. 9 so far. EPS for 9 months ended 30th September 2013 stands at Rs. 32.23.
At a PE multiple of close to 28 times, share is still at its usual premium to peers ICRA and CARE, but off its highs of 35-40 times earnings multiple, recorded in the past. Results have been good and share price is likely to touch 1,250 mark in Monday’s trade.