The Board of Directors of CRISIL Limited, at its meeting today, approved the unaudited financial results for first quarter ended March 31, 2017.
Revenue in the first quarter grew 12% year-on-year, first interim dividend of Rs. 6 per share declared
CRISIL’s consolidated total income for the quarter ended March 31, 2017, was up 12% to Rs. 402.23 crore, compared with Rs. 359.05 crore in the corresponding quarter of the previous year. Net profit was Rs. 73.34 crore, compared with Rs. 73.15 crore in the corresponding quarter last year. Net profit for the quarter was impacted by an adverse forex impact of Rs. 11.89 crore as against a gain of Rs. 3.31 crore in the corresponding quarter of the previous year.
The Board of Directors has declared payment of an interim dividend of Rs. 6 per share of Re 1 face value for the financial year ending December 31, 2017.
Ashu Suyash, Managing Director & Chief Executive Officer, CRISIL, said, “Growth for the quarter was driven by our research segment, on account of opportunities in Risk & Analytics such as model validation, stress testing and regulatory change management. Domestic businesses saw moderate growth with the corporate bond market looking up, and better performance from the advisory and risk solutions businesses. Overall, profitability for the quarter remained muted mainly on account of adverse forex movement and subdued growth in the mid-corporate and MSME segments.”
During the quarter, Rating segment witnessed modest growth despite a continued weak investment climate and soft credit growth. Transactions in the bond market improved in the first quarter while they remained low in the mid-corporate and the MSME segments. CRISIL launched the Expected Loss (EL) scale for a rating of infrastructure projects that combines the traditional Probability of Default (PD) metrics with Loss Given Default (LGD). The EL scale would enable better risk-based pricing and would facilitate greater participation by long-term investors. Global Analytical Centre, on the other hand, continues to provide core research and analytics support to S&P Global Ratings. A point of note is that the Union Budget has substantially cut subsidy allocation for fiscal 2017-18 towards Performance and Credit Ratings of MSMEs.
The Research business continues to grow, driven by opportunities in Risk & Analytics and the addition of new clients. The growth in Risk & Analytics is supported by a number of projects relating to Comprehensive Capital Analysis and Review of the US Federal Reserve, stress testing submissions of global banks and various change-management activities at global banks due to business re-organisation and regulatory changes. Further, new opportunities are coming up as banks and asset managers adopt Markets in Financial Instruments Directive (MIFID) II requirements in the European Union. Coalition showed good growth through cross-selling to its existing clients and through wins in new offerings launched last year, whereas India Research witnessed moderate growth despite sluggish corporate profitability impacting research spends.
CRISIL Risk and Infrastructure Solutions Ltd, a wholly owned subsidiary of CRISIL Ltd that houses the Infrastructure Advisory and Risk Solutions businesses, showed momentum in the current quarter driven by new business wins. We are now witnessing the positive impact of investments made over the past few years, leading to improvement in margins. The business continues to invest further in the development of new solutions and capabilities.
During the quarter, CRISIL Foundation was selected by the Reserve Bank of India (RBI) to set up and manage ‘Centres for Financial Literacy’ across 20 blocks in two states for three years.
As a part of its thought leadership and outreach initiatives, CRISIL successfully hosted its second edition of ‘India Outlook Series’ under the theme ‘Fiscal 2018: Resetting Growth Expectations’. Further, joint investor roundtables were conducted with S&P Global Ratings in Singapore and Hong Kong, reaching out to 160+ stakeholders. A symposium was hosted in New York on 'Big Data - Getting beyond the hype’ for senior asset managers.