Target: ₹5,414

CMP: ₹5,115.35

Crisil is the oldest and a leading domestic credit rating agency in India. It is majorly owned by S&P Global which is world’s foremost provider of transparent and independent ratings, benchmarks, analytics, data, research, commentary and ESG solution.

The company has diversified over the years and ventured into research and analytics and advisory services which now accounts for ~75 of its revenue. The diversification has been geographic as well with offices in Argentina, Australia, China, Hong Kong, Japan, Poland, Singapore, Switzerland, the UAE, the UK and the US.

This helps the company in getting a lot of business from the parent. Being the best-in-class industry leader, it delivers a diversified revenue mix, superior margins, solid return ratios, and free-cash-flow yield.

With the Government focus on capex, the outlook of the domestic credit rating agencies has been improving. Incentives by Government for MSME sector and easy availability of finance for retail consumers is expected to further enhance credit demand. Corporates bond issuance increased by 25 per cent in 2023 and could further increase 20 per cent in 2024 as interest rates reverse.

The Global Analytical Centre (GAC) continued to drive surveillance support across S&P Ratings’ analytical practices and partnered on data and technology transformation programmes.

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