Buy Crisil, target price Rs 2200: Centrum Broking

Centrum Broking has buy call on Crisil with a target price of Rs 2200. The current market price of Crisil Ltd. is Rs 1834.1.

Crisil Ltd., incorporated in the year 1987, is a Mid Cap company (having a market cap of Rs 13333.41 Crore) operating in Financial Services sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 508.65 Crore, down -16.92 % from last quarter Total Income of Rs 612.22 Crore and up 9.95 % from last year same quarter Total Income of Rs 462.62 Crore. Company reported net profit after tax of Rs 83.52 Crore in latest quarter.

Investment Rationale
CRISIL’s Q1CY21 results were strong mainly led by higher EBITDA margins and healthy adjusted PAT growth of 19%. Greenwich posted a lower loss YoY. Top-line was a miss led by research though ratings performed better and grew by 11.8% YoY. However, opex saw a positive surprise which supported EBITDA. Hence EBITDA margin at 25.7% was a beat and adjusted PAT saw a healthy 19% YoY growth to Rs961mn. With the Greenwich acquisition, North America contributes 41.3% to total revenues and with the US economy slated for a strong bounce back in CY21 as indicated by economic indicators, CRISIL could be a major beneficiary. The brokerage maintains positive stance on CRISIL driven by its global presence, strong parentage and diversified businesses.

Promoter/FII Holdings
Promoters held 67.40 per cent stake in the company as of the fourth quarter ending March 31, 2020, while FIIs held 5.72 per cent, DIIs 11.78 per cent and public & others 14.88 per cent.