Shares of India’s leading ratings agency jumped 8 percent following the release of strong Q2 FY25 results and the announcement of an interim dividend on October 16. Additionally, the company plans to restructure its Australian subsidiaries.
Share Price Movement
The share price of CRISIL Ltd surged 8.3 percent to an intra-day high of Rs.5,180.00 per share on Thursday, a significant rise from its previous close of Rs.4,788.70 per share. The shares have retreated since then and are currently trading at Rs.4,922.00 per share.
What Happened
Such a bullish movement in the stock price was an outcome of increase in revenue and net profits of the company in the recent quarter. According to its recent filing, in the quarter ending September 2024, CRISIL Ltd reported a 10 percent increase in revenue to Rs.811.84 crore compared to Rs.735.87 crore in Q2 FY24. Furthermore, on a quarter-over-quarter basis, the company saw an increase of 2 percent from Rs.797.35 crore in Q1 FY25.
In the same period, the company has reported a 13 percent increase in net profit to Rs.171.55 crore in Q2 FY25, up from Rs.151.99 crore Q2 FY24 and 14 percent from Rs.150.11 crores in Q1 FY2025.
In terms of return ratios, return on capital employed (ROCE) is currently at 41.4 percent, while return on equity (ROE) is at 32.3 percent. The company has a strong current ratio of 2.02 and a low debt-to-equity ratio of 0.02.
Recent Developments
CRISIL is restructuring its Australian operations by approving the sale of Peter Lee Associates Pty Ltd (PLA) to CRISIL Irevna Australia Pty Ltd. Following this transaction, PLA will be deregistered, allowing CRISIL to operate as a single subsidiary in Australia.
CRISIL Australia will pay cash equal to PLA’s Net Asset Value at the transfer completion date, streamlining its global entity structure.
Interim Dividend
The Board of Directors, in their meeting on October 16, 2024, approved a third interim dividend of Rs.15 per equity share of face value Re.1 each for the financial year ending December 31, 2024. This results in a dividend rate of 1500 percent.
Company Profile
CRISIL Limited, originally known as Credit Rating Information Services of India Limited, is India’s first credit rating agency, established in 1987. It provides a range of services including credit ratings, research, and risk and policy advisory, primarily serving the financial sector.
Written by – Siddesh S Raskar
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