Centrum's research report on CRISIL
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
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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