CRISIL Limited announces second quarter financial results for period ended June 30, 2020

The Board of Directors of CRISIL Ltd, at its meeting today, approved the unaudited financial results for quarter ended June 30, 2020.

Highlights for quarter and half year ended June 30, 2020:

- Income from operations for the quarter up 13.5% and for year to date up 8.2%
- Profit after tax for the quarter lower by 0.8%. Year to date profit after tax up by 7.6%
- Interim dividend of Rs 6 per share declared

CRISIL's consolidated income from operations for the quarter ended June 30, 2020, rose 13.5% to Rs 471.8 crore, compared with Rs 415.8 crore in the corresponding quarter of 2019. Consolidated total income for the quarter ended June 30, 2020, was up 13.2% to Rs 484.0 crore, compared with Rs 427.7 crore in the corresponding quarter of the previous year. Profit after tax for the quarter ended June 30, 2020, was Rs 66.3 crore, compared with Rs 66.9 crore in the corresponding quarter of the previous year.

Financials for the quarter include the performance of Greenwich Associates LLC (Greenwich), which was acquired in Q1 2020. Excluding this, consolidated income from operations for the quarter ended June 30, 2020, was higher by 2.2% and profit after tax higher by 28.5% compared with corresponding quarter of the previous year.

For the six months ended June 30, 2020, consolidated income from operations was up 8.2% to Rs 899.6 crore, compared with Rs 831.6 crore in the corresponding period of 2019. Consolidated total income increased 10.8% to Rs 942.1 crore, compared with Rs 850.6 crore in the corresponding period of the previous year. Consolidated profit after tax grew 7.6% to Rs 154.5 crore, compared with Rs 143.5 crore in the corresponding period of the previous year.

Consolidated income from operations for the six months ended June 30, 2020, was higher by 1.4% and profit after tax up by 28.2% compared with the previous year, excluding the financials of Greenwich. The Board of Directors has declared second interim dividend for the financial year ended December 31, 2020, of Rs 6 per share (of Re 1 face value).

Says Ashu Suyash, Managing Director & CEO, CRISIL, "Our businesses demonstrated strong resilience during the Covid-19 pandemic and the attendant lockdowns. Ratings continued its growth trajectory and we saw good demand for our global risk & analytics offerings. The acquisition of Greenwich enabled acquisition of new clients and strengthened our presence in the global benchmarking analytics space. Deep commitment and efforts of our people, high client engagement and several proactive measures were key contributors to overall results."

Bond issuance quantum soared 57% year-on-year in the second quarter, driven by high investment grade frequent issuers, even as there was an 18% decline in number of issuers. Credit growth saw a sharp slowdown contracting 0.8% in the quarter. Ratings revenues grew by 16.8%, driven by new client additions and higher issuance. Global Analytical Center (GAC) saw increase in support coverage for S&P Global Ratings and increased participation in data transformation initiatives. Overall, the Ratings segment revenue grew a healthy 10.1% in the second quarter.

The performance of the Research segment was led by robust growth in our Global Research & Analytics business and contribution from Greenwich. With sharper focus on risk management across the global financial services industry, our model risk and traded risk offerings saw new wins. Growth in the segment was however offset by muted performance of Coalition and India Research because of slower decision making and deferment of mandates. Our teams enabled our clients' transition to a remote working environment given the impact of Covid-19, while focussing on delivering high-quality research and analytics. A number of high-impact reports and press releases were issued on Covid-19 across domestic and global markets. Our report, titled 'Viral fever: Covid-19 impact on economy, corporate revenue and profitability' received very positive response from stakeholders. A plethora of webinars on a range of sectors such as automotive, dairy, oil & gas, FMCG, power, media were also very well received. White papers and publications on emerging areas such as modelling market risk for pandemics and IBOR transition were published.

CRISIL had completed the acquisition of Greenwich on February 26, 2020. Therefore, the Research segment's numbers include the first full-quarter performance of Greenwich. Excluding this, the Research segment revenue de-grew 1.1%, while sharp focus on productivity meant segmental profit was up 29.8%.

Both the Infrastructure Advisory and Business Intelligence and Risk Solutions businesses had client wins. A new offering of portfolio impact assessment to guide clients on addressing the impact of the Covid-19 pandemic on their portfolios was launched during the quarter. There were, however, delays in closure of new business so the segment saw a de-growth of 4.2%.

Our investment in technology and process as well as various cost optimisation measures has helped us drive efficiencies and margins.

All CRISIL businesses remained fully functional despite the lockdowns as we were able to adopt remote working very effectively and continue to serve the needs of clients and other stakeholders. CRISIL's people-first approach, investments in technology, multi country presence, analytical nature of our offerings and timely and decisive steps taken towards remote working has ensured full continuity of business as the pandemic unfolded across our locations of presence while ensuring health and safety of our employees.

Under 'The 10k Meals Project', CRISIL leveraged its state-of-the-art kitchen at the Mumbai headquarters to prepare and serve meals to migrant workers and under-served communities. Over 500,000 meals were served across 15 different locations in Mumbai through this initiative. The efforts were supported by generous contribution from CRISIL's employees. The community cadre of CRISIL's corporate social responsibility programs, Sakhis and GramShaktis, have been engaged in various Covid-19 prevention and relief efforts in their respective villages. CRISIL Foundation also released the CRISIL CSR Yearbook 2020 during the quarter, which received good response.

Shares of CRISIL LTD. was last trading in BSE at Rs.1703.35 as compared to the previous close of Rs. 1731.4. The total number of shares traded during the day was 1338 in over 349 trades.

The stock hit an intraday high of Rs. 1771.3 and intraday low of 1698.9. The net turnover during the day was Rs. 2316443.

Source : Equity Bulls

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