Shares of CRISIL were trading over 7% higher at ₹3,080.9 apiece on the BSE in Thursday’s early deals after reporting Q3 consolidated net profit for the quarter ended September at ₹112.9 crore, up 25% compared with ₹90.2 crore in the year-ago quarter.
CRISIL’s consolidated income from operations for the third quarter rose 17.7% to ₹571.0 crore as against ₹485 crore in the corresponding quarter of the previous year. The board also declared an interim dividend of ₹9 per share (of Re 1 face value) for the quarter ended September 30.
“CRISIL delivered a 6% revenue beat and 13% earnings beat on our estimates for Q3 CY21 – 9 months revenue growth of 15% YoY and EBITDA margins (120 bps higher YoY) tracking well ahead of our CY21 estimates,” said Yes Securities in a note.
The company maintained its margins near 26% mark despite employee cost rising amid strong revival in domestic rating revenues, sustained traction in high-margin services within Irevna and increased offshoring of Greenwich operations were likely margin drivers, as per the brokerage.
Yes Securities’ bullish stance on CRISIL remains intact, which is premised on dominant market share in India rating business pie, diversified revenue mix, improving margins and robust corporate governance and superior rating performance. “Improving earnings growth trajectory, higher dividend payouts and escalation of RoE will cause valuation to re-rate from current 36x CY23E P/E,” the note further highlighted.
The brokerage has a Buy rating on the stock with a target price of ₹3,425 per share with a time horizon of around twelve months.
As per BSE shareholding pattern, Indian ace investor Rakesh Jhunjhunwala holds 2.89% stake or 21,06,750 shares in the company whereas his wife Rekha Jhunjhunwala holds 2.57% stake or 18,68,250 shares in CRISIL Ltd. as of September 2021.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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