ICRA (ICRA) Q4 12/13 earnings summary

Executive summary

• FY2012-13 standalone operating income rose 7% YoY to ₹148.59 crore; net profit increased to ₹60.38 crore from ₹50.90 crore.

• Consolidated revenue from operations grew 21% to ₹251.41 crore and PAT rose to ₹59.16 crore from ₹54.01 crore; pre-tax profit before exceptional items declined.

• Ratings remained the main revenue engine, while consulting, software/IT, and information services expanded the group’s business mix.

Financial highlights

• Standalone total revenue rose 4% to ₹164.83 crore; operating revenue was ₹148.59 crore, while other income fell 18% to ₹16.24 crore.

• Standalone PBT declined 4% to ₹72.88 crore; PAT increased 19% to ₹60.38 crore, aided in part by lower tax expense.

• Consolidated revenue from operations increased 21% to ₹251.41 crore; total revenue reached ₹269.32 crore, up from ₹228.75 crore.

• Consolidated PBT before exceptional items fell to ₹72.94 crore from ₹79.17 crore; after an ₹0.90 crore exceptional charge, PAT was ₹59.16 crore versus ₹54.01 crore.

• Standalone employee benefit expenses were ₹64.13 crore, up 6% reported; excluding deferred employee compensation amortisation, the increase was 25%.

Outlook and guidance

• Long-term ratings outlook remained positive; softer interest rates and policy action could revive investment and support ratings activity.

• Bank-loan rating volumes were expected to grow as smaller entities sought ratings; loan sizes depended on the pace and extent of economic growth.

• SME ratings were expected to grow healthily as more banks used external ratings in lending decisions.

• Debt issuance prospects depended on an investment-cycle recovery; falling rates could prompt refinancing of high-cost debt.