ICRA Ltd. - Zen Money

Company Profile: ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional Investment Information and Credit Rating Agency. The Company operates in Outsourced and Information Services, Consulting Services, Rating Services and Professional and Information Technology (IT) Services. ICRA rates rupee denominated debt instruments issued by manufacturing companies, commercial banks, non-banking finance companies, financial institutions, public sector undertakings and municipalities, among others. The Grading Services offered by ICRA include Grading of Initial Public Offers (IPOs); Microfinance Institutions (MFIs); Construction entities; Real estate developers and projects; Healthcare entities and Maritime training institutes. ICRA, through its subsidiaries also offers rating services in Indonesia and Sri Lanka.

Strengths:

- Proven ability to make product and service innovations; Demonstrated track record of ratings; Association with the Moody's Group, besides technical services agreement with Moody's Investors Service.

- The Company has remained debt-free ever since it was incorporated and has always sought to finance all it's expansion and diversification plans with internal accruals.

Concerns:

- Changes in the volume of bank credit or debt securities issued in the domestic capital markets and any economic slowdown in India may have an adverse impact on it's business and revenues.

- High levels of interest rates and credit spreads may negatively impact the issuance of creditsensitive products and other financial services.

Outlook: ICRA, by virtue of it's leading presence in Indian markets is well placed to exploit the opportunities arising from the financial sector given its competitive strengths and strategic initiatives. Company has huge scope for growth on the back of government's initiatives in developing the domestic debt market, financial sector reform measures and greater market penetration by insurance companies and pension funds. Any further increase in participation of foreign investors, insurance companies, mutual funds and pension funds in the debt markets is expected to benefit the company. Though there could be short term margins pressure on the back of hardening interest rates and moderating investment activity, ICRA's strong financials, zero debt on books and sound technical collaboration from Moody's investor service would augur well for the company in the coming years.

Source : Equity Bulls

Keywords