Revenue grew strong 10% YoY with 48% growth in BPO segment (including export incentives). Rating segment grew moderate 7% YoY. Absence of costs attributed to ICTEAS (sold in Sept 16) led to lower operating costs and EBITDA margin expanding to 41%.

Rating Revenues in Line; Non-Rating Segment Continues To Drag Profitability ICRA's consolidated revenues witnessed a decline of 19.9% YoY in 2QFY18 to Rs738mn mainly because of the sale of information technology or IT business. This was 5.7% below our estimate of Rs783mn. If looked at on ex-IT business basis, consolidated revenues grew 2% YoY. This growth was a result of the rating business growing at 5.7% on account of the increase in debt market ratings. Non-rating business declined 9%. Under non-rating business, consultancy business declined 27% whereas outsourcing business increased 2%. EBITDA stood at Rs262mn, down 10.4% on YoY basis from Rs293mn, owing to higher employee expenses. Our estimate was Rs303mn. EBITDA margin for...

Strong Growth In Rating Business Revenues; Margins Expand We are participating in AsiaMoney's Brokers Poll 2017. We would be pleased if you vote for us as the feedback helps us align our equity research offerings to meet your requirements. ICRA's consolidated revenues witnessed a decline of 19.6% YoY in 1QFY18 to Rs697mn mainly because of the sale of information technology or IT business. This was 7.4% below our estimate of Rs753mn. If looked at on ex-IT business basis, consolidated revenues grew 5% YoY. This growth was a combination of the Click Here...

ICRA's consolidated revenues witnessed a decline of 14% YoY in 4QFY17 at Rs788mn mainly because of the sale of information technology or IT business. This was 1.5% below our estimate of Rs800mn. If looked Sector: Credit Rating at on ex-IT business basis, consolidated revenues grew 9% YoY. This growth was a combination of the rating business growing at 9% on account of an increase in debt market ratings. Non-rating business grew CMP: Rs4,255 7%. Under non-rating business, consultancy business grew 8% whereas outsourcing business increased 6%. EBITDA stood at Rs295mn, up 3.4% on YoY basis from Rs285mn, owing to lower expenses for the Target Price: Rs4,027 quarter. Our estimate was Rs227mn as we had factored in relatively higher expenses. EBITDA margin for the quarter stood at 37.4%, witnessing an expansion of 644bps on YoY basis against our estimate of 28.4%. Downside: 5%...

With 3QFY17 being the first quarter after the sale of its IT business (revenues from this segment recognised only till the transaction date of 7 October 2016), ICRA's consolidated revenues witnessed a decline of 14% YoY for the quarter and stood at Rs758mn as compared to Rs881mn in the same quarter a year ago (our expectation was 15% decline). If looked on ex-IT basis, consolidated revenues grew 6%YoY. This growth was a combination of the rating business growing 6.3% on account of the increase in debt market ratings. Non-rating business grew 6.4%. Under non-rating business, consultancy business witnessed a slowdown of 3.5% whereas outsourcing business grew 13.7%. EBITDA number came in at Rs176mn, a 39.4% decline on YoY basis, while our estimate was...

ICRA posted 8.8% consolidated revenue growth on YoY basis at Rs921mn in 2QFY17 compared to Rs846mn of the corresponding quarter a year ago, 0.9%/0.4% below our/consensus estimate, respectively. This growth was driven by the rating business which grew 7% mainly on account of the increase in debt market and structured finance-related ratings. Non-rating business improved 12% YoY because of a healthy performance across outsourced and information services/consultancy services growing 22.4%/9.2%, respectively, and a meagre growth of 7.5% in IT-related services. Following a 66bps improvement in employee expenses and a 319bps decline in other expenses, operating margin improved 253bps to 31.5%, 22bps below our estimate. Operating profit improved 18.3% to Rs290mn, but missed our estimate by 1.5% although it beat consensus estimate by...

Healthy Rating As Well As Non-Rating Business Growth Following healthy growth in rating as well as non-rating business revenues, ICRA posted 12.6% YoY improvement in net revenues in 1QFY17 to Rs867mn, 2.5% above our estimate. Rating business growth of 10% was driven mainly by a pick-up in working capital requirement and refinancing activity during the quarter. Non-rating business improved 16.2% YoY because of healthy performance across all segments with IT related services /outsourced & information services/consultancy revenues improving 16.2%/21.9%/7.8%, respectively. Following 98bps/290bps decline in employee/other expenses, respectively, operating margin improved 388bps to 28.6%, 233bps above our estimate. Operating profit...

Following a flattish growth in both rating and non-rating business revenue, ICRA posted a 1.2% YoY decline in net revenue in 4QFY16 to Rs920mn, 9.4%/7.7% below our/Bloomberg consensus estimate, respectively. Rating business growth was subdued due to muted growth in debt market issuance and bank loan ratings in this quarter. Non-Ratings business declined by 1.6% YoY because of subdued performance of IT services and consultancy segment, reporting a 3.8%/19.6% YoY decline in revenue, respectively while outsourced & information services & consultancy revenue grew 21.3% YoY. For FY16, the revenue growth in Ratings/Non-rating segment was 7.8%/3.8% respectively. From the past few quarters, growth in rating revenue of ICRA has been very strong compared to its peers...

led by debt market-related ratings, but slightly subdued because of weak bank loan rating business. The growth in rating revenue of ICRA was very strong compared to its Target Price: Rs4,374 peers(7.9%/17.4%/11.1%/9% in 4QFY15/1QFY16/2QFY16/3QFY16, respectively). CARE increased its rating revenue at a meagre pace of 3.2%/13.0%/5.3%/0.5% in 4QFY15/1QFY16/2QFY16/3QFY16, Upside:16% respectively, versus 9.5%/3.0%/0.2% decline and 3.2% growth, respectively, reported by rival Crisil in respect of rating revenue over the same period. EBIT margin in rating business for CRISIL Chitvan Oza...

Stable revenue streams across segments; and Debt Issuances across thecorporations to improve revenues for ICRA: The company has posted a revenue growth of 13.8% for FY15. The revenue for ICRA is derived mostly from the core ratings and research services (56.7%), consulting services (9.2%), outsourced and information services (10.5%) and Professional and IT services (23.6%). The revenues are likely to grow around 9.6% for FY16E, 10.8% for FY17E and 14.0% for FY18E. Improvement in credit-off take is likely to boost the rating business across all the sectors in the years to come.

decrease in employee costs, operating margin improved 339bps to 29%, in line with our estimate but 132bps above Bloomberg consensus estimate. With healthy revenue growth and improvement Target Price: Rs4,013 in operating margin, EBITDA increased 24.8% to Rs245mn, 3.0% below our estimate but 2.5% above Bloomberg consensus estimate. In the wake of higher other income (25% above our Upside: 3% estimate) in 2QFY16 and a higher tax rate of 76.6% (on account of prior-period adjustments last year), net profit improved 66.8% to Rs205.7mn, in line with our estimate but 7.7% above Chitvan Oza...

Performance In Line, But Higher Tax Outgo Hurts PAT Following a 16.5% growth in rating revenue, ICRA posted a healthy 12.9% rise in 1QFY16 net revenue to Rs770mn, 1.1%/0.9% above our/Bloomberg estimates, respectively. Despite subdued activity in debt market, rating revenue grew by a strong 16.5% and EBIT margin of rating segment improved 63bps to 29.4%. Consulting and information technology-related businesses reported subdued 4%/(0.4)% growth, respectively, while the non-rating segment posted a 167bps decline in EBIT margin, thereby exerting pressure on overall margin. Consolidated operating margin declined 28bps to 24.7%, 101bps/139bps below our/Bloomberg estimates, respectively. ICRA's...

Following a 28.0% growth in non-rating revenue, ICRA posted a healthy 15.9% rise in 4QFY15 net revenue to Rs931mn, 4.1%/2.6% above our/Bloomberg estimates, respectively. With subdued activity in debt market, rating revenue grew by a mere 8.5% while because of high employee costs, operating margin of rating segment declined227bps to 47.1%. BPO and IT-related businesses reported healthy 36.5%/30.0% growth, respectively, while non-rating segment posted a 191bps improvement in operating margin, thereby reducing the pressure on operating margin. Consolidated margin declined 173bps to 36.8%, 254bps/52bps below our/Bloomberg estimates,...

ICRA posted a 20.6% rise in 3QFY15 net profit to Rs178mn, 6.6%/5.0% above our/Bloomberg estimates, respectively, because of a 60bps improvement in operating margin and higher other income. With subdued activity in debt market, rating revenue grew by a mere 8.0%, which was compensated by a healthy 17.0% growth in non-rating business. BPO and IT-related businesses reported healthy 27.4%/16.7% growth, respectively. On account of a 665bps improvement in non-rating operating margin, consolidated margin rose 60bps to 32.6%, 192bps above Bloomberg estimate, despite a 342bps decline in rating margins. Following weak...