ICRA (ICRA) Q4 06/07 earnings summary

Executive summary

• FY07 consolidated operating income rose to ₹705.72m from ₹543.21m; profit after tax reached ₹199.93m versus ₹142.29m.

• Parent standalone operating income increased 20% to ₹397.90m and PAT rose 27% to ₹161.00m; EPS was ₹18.23 versus ₹14.37.

• Growth was led by ratings and stronger subsidiary activity in advisory, software and BPO; standalone information and BPO fee income declined following business transfers and a scale-down.

Financial highlights

• Standalone Q4 operating income was ₹104.96m, up 23% YoY; total income was ₹122.89m, up 23%, and PBDIT was ₹62.90m, up 33%.

• FY07 standalone total income rose 21% to ₹467.69m; PBDIT increased 26% to ₹238.76m and PBT reached ₹222.31m versus ₹173.91m.

• Standalone PAT was ₹161.00m versus ₹126.51m; proposed dividend was ₹4.50 per share versus ₹4.00, with a 45% dividend rate.

• Consolidated operating income grew to ₹705.72m from ₹543.21m; consolidated PAT was ₹199.93m versus ₹142.29m, and EPS was ₹22.64 versus ₹16.16.

Outlook and guidance

• Rating outlook remained positive, supported by continued economic growth, bank-credit expansion, Basel II implementation, mandatory IPO ratings and possible domestic debt-market development.

• FY08 software and analytics outlook anticipated further growth, new niche products and expansion into the US, Asia and Europe; a US subsidiary was incorporated in April 2007.

• Advisory outlook was supported by a broader client base, international mandates and investments in IT, research, people and operating systems to enable scale-up.

• Online products and BPO were positioned for further revenue growth and overseas expansion, with new offerings and active marketing planned.