Edelweiss recommended hold rating on ICRA with a target price of Rs 4345 in its research report dated May 15, 2017.
Edelweiss' research report on ICRA
ICRA’s Q4FY17 revenue decline by 14% (to INR 788mn) was primarily due to the sale of IT business (segment revenue plunged 99% YoY), though continuing segments’ revenue growth stood at 9%. EBITDA growth of 3% was led by the strong 644bps margin expansion (due to exclusion of low margin IT business) and PAT of continuing operations grew 20%.
On strong structural opportunities in domestic debt market, focus on core (ratings) business (driving 570bps EBITDA margin expansion over FY17-19E) and benefiting from strong parentage (Moody’s), we estimate 22% earnings CAGR over FY17-19. We upgrade to ‘HOLD’ with DCF-based target price of INR 4,345.
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