CRISIL (CRISIL) Q4 03/04 earnings summary

Executive summary

• FY04 total income rose to ₹733.69m from ₹718.56m; standalone PAT was nearly flat at ₹179.41m vs ₹179.22m, while consolidated PAT reached ₹193.21m vs ₹166.70m.

• Despite shrinking domestic debt issuance and intense advisory competition, ratings retained market leadership; research and risk services grew, while international expansion broadened the business mix.

Financial highlights

• Standalone operating income was ₹690.56m, up 3.08%; other income was ₹43.13m, down 11.35%, taking total income to ₹733.69m, up 2.11%.

• Standalone PBT declined 4.21% to ₹268.41m; PAT was ₹179.41m, up 0.11%, after tax provision of ₹89.00m vs ₹101.00m.

• Consolidated operating income was ₹845.43m vs ₹713.85m; total income was ₹887.94m vs ₹762.48m, and PAT was ₹193.21m vs ₹166.70m.

• Standalone operating expenses increased 6.14% to ₹465.28m, led by staff costs up 20.11%; depreciation fell 14.20% to ₹61.84m.

• Standalone operating cash flow was ₹248.83m vs ₹243.48m; investing used ₹187.98m and financing used ₹54.32m.

Outlook and guidance

• Management expected ratings growth to improve with a pickup in debt issuance and capital investment; structured finance and governance/value-creation ratings also had favorable prospects.

• Domestic infrastructure advisory was expected to recover with new governments, renewed policy activity and multilateral mandates; Electricity Act 2003 and gas-sector developments were cited as growth catalysts.

• Risk services prospects were described as promising amid Basel II implementation and rising compliance needs; research demand was supported by economic recovery and international outsourcing opportunities.

• Major advisory mandates won late in FY04 were expected to contribute significantly to revenue in the next year.