CRISIL - Medium term pressures to prevail - Emkay

Reco: ACCUMULATE
CMP: Rs 907
Target Price: Rs 1050

- Rating revenues are likely to remain under pressure given sluggish debt issuance and muted credit growth. Debt issuance fell from Rs1.1tn in Q1CY12 to Rs483bn in Q2CY12.

- Healthy client addition in Q2CY12 in Pipal/ Irevna/ Coalition to drive growth in research in CY13. Expect research revenue to grow at a CAGR of 32% over CY11-13.

- The hedging of the revenues (40%/55% of rev in CY10/11) has capped the revenue as well as EBIDTA expansion despite INR depreciating significantly vis-à-vis USD as well as GBP.

- Cut our TP on the stock to Rs1050 (-15%), in line with our cut in earnings (-16%/-17% for CY12/13E). However retain ACCUMULATE rating on the stock.

Source : Equity Bulls

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