Q1-FY17 Financial Results - Credit Rating · q1-fy17 financial results d. r. dogra md & ceo. q1 fy17 results 8th august 2016 safe harbor statement 2 this presentation and the accompanying

Q1-FY17 Financial Results

D. R. Dogra

MD & CEO

Q1 FY17 Results 8th August 2016

SAFE HARBOR STATEMENT

2

THIS PRESENTATION AND THE ACCOMPANYING SLIDES (THE “PRESENTATION”), WHICH HAVE BEEN PREPARED BY CREDIT ANALYSIS &

RESEARCH LIMITED (THE “COMPANY”), HAVE BEEN PREPARED SOLELY FOR INFORMATION PURPOSES AND DO NOT CONSTITUTE ANY

OFFER, RECOMMENDATION OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES, AND SHALL NOT FORM THE BASIS OR

BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR BINDING COMMITMENT WHATSOEVER. NO OFFERING OF SECURITIES OF

THE COMPANY WILL BE MADE EXCEPT BY MEANS OF A STATUTORY OFFERING DOCUMENT CONTAINING DETAILED INFORMATION

ABOUT THE COMPANY.

THIS PRESENTATION HAS BEEN PREPARED BY THE COMPANY BASED ON INFORMATION AND DATA WHICH THE COMPANY CONSIDERS

RELIABLE, BUT THE COMPANY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WHATSOEVER, AND NO RELIANCE

SHALL BE PLACED ON, THE TRUTH, ACCURACY, COMPLETENESS, FAIRNESS AND REASONABLENESS OF THE CONTENTS OF THIS

PRESENTATION. THIS PRESENTATION MAY NOT BE ALL INCLUSIVE AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU MAY

CONSIDER MATERIAL. ANY LIABILITY IN RESPECT OF THE CONTENTS OF, OR ANY OMISSION FROM, THIS PRESENTATION IS EXPRESSLY

EXCLUDED.

CERTAIN MATTERS DISCUSSED IN THIS PRESENTATION MAY CONTAIN STATEMENTS REGARDING THE COMPANY’S MARKET

OPPORTUNITY AND BUSINESS PROSPECTS THAT ARE INDIVIDUALLY AND COLLECTIVELY FORWARD-LOOKING STATEMENTS. SUCH

FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO KNOWN AND UNKNOWN

RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE

NOT LIMITED TO, THE PERFORMANCE OF THE INDIAN ECONOMY AND OF THE ECONOMIES OF VARIOUS INTERNATIONAL MARKETS,

THE PERFORMANCE OF THE RATING INDUSTRY IN INDIA AND WORLD-WIDE, COMPETITION, THE COMPANY’S ABILITY TO

SUCCESSFULLY IMPLEMENT ITS STRATEGY, THE COMPANY’S FUTURE LEVELS OF GROWTH AND EXPANSION, TECHNOLOGICAL

IMPLEMENTATION, CHANGES AND ADVANCEMENTS, CHANGES IN REVENUE, INCOME OR CASH FLOWS, THE COMPANY’S MARKET

PREFERENCES AND ITS EXPOSURE TO MARKET RISKS, AS WELL AS OTHER RISKS. THE COMPANY’S ACTUAL RESULTS, LEVELS OF

ACTIVITY, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY AND ADVERSELY FROM RESULTS EXPRESSED IN OR IMPLIED

BY THIS PRESENTATION. THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING INFORMATION CONTAINED

IN THIS PRESENTATION. ANY FORWARD-LOOKING STATEMENTS AND PROJECTIONS MADE BY THIRD PARTIES INCLUDED IN THIS

PRESENTATION ARE NOT ADOPTED BY THE COMPANY AND THE COMPANY IS NOT RESPONSIBLE FOR SUCH THIRD PARTY STATEMENTS

AND PROJECTIONS.


Contents

Highlights

Financial & Business Performance

MCR / CDQI

New Developments

Economic Backdrop

3


Highlights: Q1-FY17

• Growth in Financial Indicators

– Growth in Rating revenue of 18.1%

– Growth in Operating Profit of 49.0%

– Growth in Total Income of 16.1%

– Reduction in expenditure of 10.3%

– EBITDA margins at 63.3% and PAT margins at 41.4% in Q1-FY17

– 555 new clients added during Q1-FY17

– Interim dividend of Rs. 6/- per share declared

• Business Profile

– Total volume of debt rated stood at Rs 3.78 lakh crore in Q1-FY17 as against Rs 2.65

lakh crore in Q1-FY16

– Total number of instruments rated were 1,325

4


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

5


Financial Performance

Rs. crores Q1-FY16 Q1-FY17 Growth

Rating Revenue 48.04 56.76 18.1%

Information Services Revenue 0.40 0.39 -2.5%

Total Operating Revenue 48.44 57.15 18.0%

Other Income 2.92 2.49 -14.7%

Total Income 51.36 59.64 16.1%

Total Expenses 25.35 22.74 -10.3%

EBITDA 27.08 37.75 39.4%

Operating profit 23.09 34.41 49.0%

Profit After Tax 17.49 24.67 41.1%

EBITDA margin 52.7% 63.3%

Operating Profit margin 47.7% 60.2%

Profit After Tax Margin 34.1% 41.4%

6


Financial Performance:Q1-FY17 (Rs cr)

48.44

57.15

44

46

48

50

52

54

56

58

Q1 FY16 Q1 FY17

Total Operating Revenue

25.35

22.74

20

23

26

Q1 FY16 Q1 FY17

Total Expenditure

23.09

34.41

10

20

30

40

Q1 FY16 Q1 FY17

Operating Profit

17.49

24.67

0

10

20

30

Q1 FY16 Q1 FY17

Profit After Tax

7


Financial Performance: Q1-FY17

ESOP expense of Rs. 1.34 crore included

only in Q1 FY16 and due to expenses

relating to SME Biz. Dev. teams in Q1

FY16.

Q1 FY17 PAT margin stood at 41.4% as

against 34.1% in Q1 FY16 mainly due to

growth in revenue and reduction in

expenses.

47.7

60.2

0

10

20

30

40

50

60

70

Q1 FY16 Q1 FY17

Operating Profit Margin (%)

34.1

41.4

-

10

20

30

40

50

Q1 FY16 Q1 FY17

Profit After Tax Margin (%)

8


Business Performance

10,332

10,950

11,838

12,373 12,127

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

13,000

June'15 Sept'15 Dec'15 Mar'16 Jun'16

Total Active Clients

9


Business Performance: Q1-FY17

0.25

1.59

0.80

2.65

0.43

2.13

1.22

3.78

0

1

2

3

4

Short & Medium term Long term Bank Loan Ratings Total

Volume of Debt Rated (Rs lk cr)

Q1 FY16 Q1 FY17

10


Business Performance: Q1-FY17

25 49

953

379

1,406

16 76

987

246

1,325

-

200

400

600

800

1,000

1,200

1,400

1,600

Short & Medium

term

Long term Bank Loan Ratings Others Total

No of Instruments Rated

Q1 FY16 Q1 FY17

11


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

12


Rating Movement

Credit Quality of domestic rated firms / entities has declined in Q1 FY17 as indicated by the

MCR. It has come down to less than unity after two quarters.

1.33

0.800.90

1.05 1.070.98

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

Q1 FY12 Q1 FY13 Q1 FY14 Q1 FY15 Q1 FY16 Q1 FY17

MCR

13


CARE Ratings Debt Quality Index (CDQI)

The CDQI has been witnessing a downward movement. After declining in March’16 by 0.88 points, CDQI

remained steady in April’16. The fall in CDQI continued in May’16 where it stood at 90.69, 0.36 points

below the level of previous month. However, the trend reversed in June’16. The index saw some

improvement by 0.15 points and has been recorded at 90.84.

97.63

95.35

90.84

86

90

94

98

102

Ma

r'1

2

Jun

e'1

2

Se

pt'

12

De

c'1

2

Ma

r'1

3

Jun

e'1

3

Se

pt'

13

De

c'1

3

Ma

r'1

4

Jun

e'1

4

Se

pt'

14

De

c'1

4

Ma

r'1

5

Jun

'15

Se

pt'

15

De

c'1

5

Ma

r'1

6

Jun

e'1

6

14


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

15


New Developments

• CARE Ratings was associated as ‘knowledge partner’

in the 14th edition of Outlook Money Awards 2015,

Mumbai.

• CARE Ratings evaluated as per Jury approved Criteria

and also validated data on sample basis.

16


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

17


Economic Backdrop

7.5 7.67.2

7.97.6

0.0

2.0

4.0

6.0

8.0

10.0

Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 FY16

GDP growth seen at 7.8% in FY17

Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16 FY16

2.8

-0.1-1.0

0.0

1.0

2.0

3.0

4.0

Apr-May FY16 Apr-May FY17

Negative Industrial Growth

Apr-May FY16 Apr-May FY17

18


Economic Backdrop

5.8

1.6

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Ap

r-1

5

Jun

-15

Au

g-1

5

Oct

-15

De

c-1

5

Fe

b-1

6

Ap

r-1

6

Jun

-16

CPI (%) WPI (%)

60.59

62.0062.25

63.50

64.91

65.93

67.5

66.9

60

62

64

66

68

Q2

FY

15

Q3

FY

15

Q4

FY

15

Q1

FY

16

Q2

FY

16

Q3

FY

16

Q4

FY

16

Q1

FY

17

Rs/$

• In Q1 FY17, the inflation in CPI and WPI has

picked up. However, with the monsoon on

track there would be less pressure on

inflation in the coming months.

• After depreciating continuously till Q4

FY16, rupee appreciated marginally in Q1

FY17. However, there could be downward

pressure due to redemption of FCNR

deposits in Q2 FY17.

19


Economic Backdrop

Source: RBI

Source: SEBI

389,410

528,550

0

100,000

200,000

300,000

400,000

500,000

600,000

Apr-Jun FY16 Apr-Jun FY17

CP Issuances (Rs cr)

410

141,624 142,034

1,899

134,456 136,355

-

50,000

100,000

150,000

Public Issue Private Placement Total

Corporate Debt Raised (Rs cr)

Q1 FY16 Q1 FY17

• Nearly 72% of total

corporate debt is

raised by financial

services in Q1 FY17

1.2

-1.0

1.42.0

-0.3

-3.1

1.6 1.7

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

Bank Credit Industry Services Retail

Growth in Credit (%)

Q1 FY16 Q1 FY17

20


Economic Backdrop

6.50

9.59

6.00

8.00

10.00

12.00

Ap

r-1

5

Jun

-15

Au

g-1

5

Oct

-15

De

c-1

5

Fe

b-1

6

Ap

r-1

6

Jun

-16

Repo Rate and Base Rate (%)

Repo Rate (%) Base Rate (%)

7.49

7.1

7.2

7.3

7.4

7.5

7.6

7.7

7.8

7.9

8

8.1

Ap

r-1

5

Jun

-15

Au

g-1

5

Oct

-15

De

c-1

5

Fe

b-1

6

Ap

r-1

6

Jun

-16

G Sec Yield (%)

G Sec Yield (%)

21


Economic Outlook for FY17

• GDP growth to improve gradually to 7.8% in FY17

• Inflation expected in the range of 5-5.5%

• Rupee to be in the range of Rs.68-69 post redemption of

FCNR deposits

• Marginal increase in capital formation

• RBI to maintain accommodative monetary policy stance

– easing of interest rate by 25 bps seen this fiscal

22


Thank You

23

Documents

Q1-FY17 Financial Results - Credit Rating · q1-fy17 financial results d. r. dogra md & ceo. q1 fy17 results 8th august 2016 safe harbor statement 2 this presentation and the accompanying