ICRA (ICRA) Q4 04/05 earnings summary

Executive summary

• FY2004-05 total income was Rs. 414.50 million; profit after tax fell to Rs. 80.99 million from Rs. 110.59 million, while operating income rose to Rs. 371.05 million from Rs. 328.61 million.

• Credit-rating volumes expanded, led by structured finance; consulting revenue grew 33% despite competition, while the consulting division’s planned demerger awaited court approval.

Financial highlights

• Operating income was Rs. 371.05 million versus Rs. 328.61 million; total income was Rs. 414.50 million versus Rs. 399.97 million.

• Total expenditure rose to Rs. 287.54 million from Rs. 237.92 million; profit before depreciation and tax was Rs. 126.96 million versus Rs. 162.05 million.

• Profit before tax was Rs. 112.71 million versus Rs. 148.31 million; profit after tax was Rs. 80.99 million versus Rs. 110.59 million.

• Other income fell to Rs. 43.45 million from Rs. 71.36 million, including lower investment-sale gains; FY2004-05 also included Rs. 4.91 million loss on investment sales.

Outlook and guidance

• Higher investment demand and potential reduction in excess banking-system liquidity could support domestic issuance; wider emerging-market spreads under harder global rates may also improve prospects, subject to currency movements.

• Consulting services were expected to transfer to the newly incorporated subsidiary in FY2005-06, subject to High Court approval of the demerger scheme.

• Growing awareness and use of construction, real-estate and healthcare grading, including use in project pre-qualification, was expected to support adoption.