CRISIL shares gain over 2% after 17.5% surge in Q4 net profit

Shares of CRISIL (Credit Rating Information Services of India Limited) opened 2.1 percent higher on Monday on the back of strong fourth-quarter earnings.

The rating agency’s consolidated net profit surged 17.5 percent on-year to Rs 158 crore in fourth quarter, compared to Rs 135 crore a year back. The company follows the calendar year for reporting its financial results.

Income from operations increased 16.5 percent to Rs 822 crore against Rs 706 crore reported a year ago. On a yearly basis, profit for the year ended December 2022 increased 31 percent to Rs 564 crore, while total revenue increased 20 percent to Rs 2,769 crore.

Overall bank credit continued to grow owing to traction in the large corporate, micro, SME (small and medium enterprises), and retail segments and corporate bond issuances also recovered in the quarter after a sluggish run.

The company saw momentum in bank loan ratings. Overall revenue was up 9 percent on-year in the quarter, and 13 percent in 2022.

The Ratings segment grew 9 percent in the quarter and 12 percent for the year ended December 31, 2022.

“Global economic activity held up well in the December quarter with inflation showing signs of peaking. We saw growth across our 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,” Amish Mehta, MD and CEO, said.

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The company declared a final dividend of Rs 23 per share for the year ended December 2022, in addition to the three interim dividends paid by the company totaling Rs 25 per share. The company plans to pay the dividend by April 24, 2023.

“The Board of Directors has recommended a final dividend of Rs 23 per share (of Re 1 face value). The total dividend for the year works out to Rs 48 per share,” the company said in a regulatory filing.

On Sunday, the company also announced the acquisition of Peter Lee, an Australian research and consulting firm, for AUD 6.15 million through its wholly-owned subsidiary CRISIL Irevna Australia Pty. ltd. The acquisition is expected to be completed in the next three months.

“Peter Lee is the pre-eminent brand for benchmarking analytics in Australia and New Zealand. The acquisition complements CRISIL’s existing portfolio and accelerates its strategy in the APAC region to be the foremost player in the growing market.” CEO Amish Mehta.

In the last 1 year, shares of CRISIL have gained around 16 percent while valuation of peers ICRA and CARE are up 26 percent and 33 percent respectively.

On Monday, CRISIL shares were trading 2.13 percent higher at Rs 3,207.95 apiece at 10.26am.