Dalal Street Investment Journal - - REVIEWS -

We had rec­om­mended CRISIL in is­sue no. 18 dated Au­gust 21, 2016, un­der the ‘Choice Scrip’ sec­tion when the scrip was trad­ing at ₹2098. Our rec­om­men­da­tion was based on the com­pany’s sig­nif­i­cant trac­tion in in­dus­try in near term dur­ing the time of rec­om­men­da­tion, con­sis­tent strong fi­nan­cials and a di­ver­si­fied seg­ment.

CRISIL is one of the lead­ing rat­ing agen­cies in In­dia. Op­er­at­ing in the seg­ments of rat­ings, re­search and ad­vi­sory, the com­pany pro­vides rat­ings, data, re­search, an­a­lyt­ics and so­lu­tions, be­sides con­duct­ing in­fra­struc­ture ad­vi­sory and risk so­lu­tions through its sub­sidiary. On the fi­nan­cial front, CRISIL posted 7.44 per cent rise in its rev­enue from ₹271.34 crore in Q1FY17 to ₹291.54 crore in Q1FY18. The com­pany’s profit be­fore in­ter­est, de­pre­ci­a­tion and tax (PBIDT) stood at ₹ 76.42 crore in Q1FY18, up by

7.63 per cent on a YOY ba­sis. The profit af­ter tax of the com­pany stood at ₹55.42 crore, an in­crease of 15.17 per cent in the first quar­ter of FY18 on a yearly ba­sis.

On an an­nual ba­sis, the com­pany’s rev­enue in­creased 18.15 per cent to ₹1,129.59 crore in FY17 from ₹956.10 crore in FY16. The com­pany’s PBIDT stood at ₹367.07 crore in FY17, up by 20.54 per cent as against the PBIDT in FY16. The com­pany’s profit af­ter tax stood at ₹255.66 crore, up by 15.16 per cent in FY17 from ₹222.01 crore in FY16. On the val­u­a­tion front, the share price of CRISIL is trad­ing at a PE of 51.28x as against its peers such as Care Rat­ings (31.24x) and ICRA (46.1x), whereas the in­dus­try PE stood at 44.25x.

Af­ter our rec­om­men­da­tion, the share price of CRISIL dropped by about 14 per cent. The stock is on a down­ward trend, hence we had rec­om­mend in­vestors to EXIT.

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