Mehabe score: 4 G Factor: 2 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 4.
Description
CRISIL Ltd is a globally diversified analytical Company providing ratings, research, risk and policy advisory services. CRISIL is India’s leading ratings agency and the foremost provider of high-end research to large banks and leading corporations.#
Main Points
Ratings Business (28% of revenues)#
The company is the largest credit rating agency in India. Its capabilities span the entire range of debt instruments.
It has ratings outstanding on over 8,000 large and mid-scale corporates and financial institutions.#
The company separated its credit ratings business into a wholly owned subsidiary, CRISIL Ratings Ltd pursuant to changes in SEBI regulations.Site:CRISILMain Symbol:CRISIL
Stock trades at 3004.0, above its 50dma 2432.28. It also trades above its 200dma 2057.42. The stock remains bullish on techicals
The 52 week high is at 3210.00 and the 52week low is at 1564.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 30.00%
– has been maintaining a healthy dividend payout of 64.79%
Weakness
– Stock is trading at 16.66 times its book value
-The company has delivered a poor sales growth of 7.51% over past five years.
Competition
– The industry trades at a mean P/E of 43.8x. CRISIL trades at the industry’s max P/E of 62.16x. CRISIL trades at a P/E of 62.2x
– Industry’s mean G-Factor is 3.7 while the mean Piotski score is 8.0. CRISIL has a G-Factor of 2 and Piotski scoreof 4.
– Average 1 month return for industry is 11.5%. The max 1- month return was given by ICRA: a return of 17.59 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 529.0 cr compared to Rs 472.0 cr for period ended Jun 2020, a rise of 12.1%
Operating Profits reported at Rs 139.0 cr for period ended Jun 2021 vis-vis 116.0 for period ended Jun 2020 .
Operating Margins expanded 170.0 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 13.86 compared to Rs 11.49 for previous quarter ended Mar 2021 and Rs 9.15 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2106.0 cr for period ended TTM vis-vis sales of Rs 1982.0 cr for the period ended Dec 2020, a growth of 5.9%. The 3 year sales cagr stood at 6.4%.
Operating margins shrank to 25.0% for period ended TTM vis-vis 26.0% for period ended Dec 2020, contraction of 100.0 bps.
Net Profit reported at Rs 385.0 cr for period ended TTM vis-vis sales of Rs 355.0 cr for the period ended Dec 2020, rising 7.8%.
Company recorded a Net Profit CAGR of 2.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 500.0 cr for period ended Dec 2020 vis-vis Rs 446.0 cr for period ended Dec 2019
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 28.0% compared to 30.0% over the last 3 Years. – The stock has given a return of 74% on a 1 Year basis vis-vis a return of 19% over the last 3 Years. – The compounded sales growth on a TTM bassis is 18% vis-vis a compounded sales growth of 6% over the last 3 Years. – The compounded profit growth on a TTM basis is -1% vis-vis a compounded profit growth of 6% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 6.81% vis-vis 6.71% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 13.91% vis-vis 14.16% for Mar 2021
Conclusion
– has reduced debt.
– is almost debt free.
– has a good return on equity (ROE) track record: 3 Years ROE 30.00%
– has been maintaining a healthy dividend payout of 64.79% – Stock is trading at 16.66 times its book value
-The company has delivered a poor sales growth of 7.51% over past five years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 2432.28 and is trading at 3004.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
