February 27, 2017 / 13:28 IST
Centrum's research report onCRISIL Crippled by the slow-pace of investment activities and considerable reduction in SME subsidies, rating revenue growth is set to remain low, though significantly higher than the past run-rate. We have tweaked our estimates accordingly. Valuations at 33.4x CY18E EPS limit nearterm upside. Prefer CARE Ratings in the rating agency space.
Outlook
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We retain our Hold rating on CRISIL and revise our TP to Rs 2,160 (35x Dec’18E EPS). The company’s ratings business picked-up in CY16 (+7.7% YoY vs. decline of 2.5% in CY15); research and advisory businesses continued to gain traction. The pace of growth in its non-rating business (i.e. research and advisory) is set to remain intact following product innovation, regulatory compliance related business and opportunities on risk solutions and infrastructure advisory.
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