CRISIL - All Eyes On Growth In Global Businesses: Yes Securities

Yes Securities Report

We interacted with CRISIL Ltd. to get a closer perspective on its latest quarterly performance and on growth and margin outlook across key business segments.

While growth traction has been strong in domestic ratings and S&P ratings support (GAC) businesses, there is near-term uncertainty in global businesses (particularly benchmarking analytics).

The latter could weigh on company’s growth in the current year given its large contribution in revenue. Despite factoring stronger growth in ratings segment and inherent hedge from varied offerings in global businesses, we prune revenue growth estimates for CY23/24.

While Ebitda margin in global businesses would be impacted by growth slowdown, the margin expansion in domestic ratings, revenue mix shift towards ratings segment, modularity in employee cost and measured hiring (not filling attrition) would help in managing margins.

We still believe that a calibrated margin expansion is possible over the coming years. We now estimate 15% earnings compound annual growth rate over CY22-25 with return on equity reaching 34-35% in CY25 assuming stable dividend payout.

Rate the stock as 'Neutral' and the upside risk to our view will be further uptick in ratings growth and improved growth visibility in global businesses.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.