CRISIL Q2 FY26 Preview + FY25 Recap: Rating Everyone Else While Trading at 50x PE
1. At a Glance
CRISIL is that teacher who grades everyone else’s exam papers but conveniently forgets to check their own. India’s largest rating agency, global research shop, and policy whisperer — the company makes 29% operating margins, 28% ROE, and yet trades at a nosebleed 50x P/E. With 67% parentage by S&P Global, it’s basically the desi cousin of Standard & Poor’s, but charging Ivy League fees for Indian-style tuition classes.
2. Introduction
CRISIL has always been the nerd in the class. It doesn’t build factories, it doesn’t make cars, it doesn’t even sell medicines. What it does is even better — it passes judgement on those who do. Whether it’s a steel company looking for a rating, a bank wanting risk models, or an African government needing infrastructure advice, CRISIL is the go-to examiner.
The money spinner is the Ratings business (28% revenue, 51% profit) — a license to print cash because once SEBI says “you need ratings,” you can’t negotiate much. The rest comes from Global Research (65%) — fancy analytics delivered to Wall Street and London — and Advisory (7%) where they advise governments on policy and infra, often with World Bank / ADB-funded contracts.
And yet, the irony remains. For a company that earns by saying “this bond is overpriced,” CRISIL’s own stock looks like a 1999 dot-com bubble poster child — P/B 12.9x, P/E 50x.
Question for you: Do you trust a ratings agency stock trading like a midcap pharma?
3. Business Model – WTF Do They Even Do?
CRISIL = Three mini-companies in one:
Ratings (28% revenue)
35,000+ corporates rated.
Contributes more than half the profits.
Regulatory moat: SEBI makes sure you can’t open “Sharma Ratings Pvt Ltd” from your garage.
Research (65% revenue)
India Research: Covers 77 sectors, works with 90% of Indian banks.
Global Analytics: Serves 140+ financial institutions across New York, London, Shanghai, Buenos Aires.
Coalition + Greenwich: Investment banking benchmarking + survey-based analytics (Greenwich was a 2020 acquisition).
Advisory (7% revenue)
Infra projects in India & Africa.
Risk solutions for banks (stress testing, Basel III compliance).
Basically, PowerPoint consultants with CFA badges.
Their geographic spread: 41% revenue from North America, 28% India, 23% Europe, rest APAC/others. Employees? 4,700+ globally, but 86% in India — proving Gurgaon + Powai are cheaper than Manhattan.
4. Financials Overview
Source table
Metric
Latest Qtr (Jun’25)
YoY Qtr (Jun’24)
Prev Qtr (Mar’25)
YoY %
QoQ %
Revenue (₹ Cr)
843
797
813
5.7%
3.7%
EBITDA (₹ Cr)
239
207
232
15.5%
3.0%
PAT (₹ Cr)
172
150
160
14.7%
7.5%
EPS (₹)
23.5
20.5
21.9
14.7%
7.5%
Commentary:
Top line growth is sluggish (mid-single digits).
Profits are growing faster thanks to efficiency.
EPS annualized ≈ ₹94 → At CMP ₹4,951, that’s P/E 52x. Even FMCG companies are blushing.
5. Valuation Discussion – Fair Value Range Only
Method 1: P/E Multiple
EPS (TTM): ₹99.5.
Industry PE: ~35x.
Range: 35x–45x → ₹3,480 – ₹4,480.
Method 2: EV/EBITDA
EV = ₹36,246 Cr.
EBITDA FY25 = ₹982 Cr.
EV/EBITDA = 37x.
Fair Range: 25x–30x → ₹3,300 – ₹3,950.
Method 3: DCF
Assume PAT CAGR 12%, discount 10%.
DCF value ≈ ₹3,600 – ₹4,200.
Overall Range: ₹3,300 – ₹4,500.
⚠️ Disclaimer: This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Global Restructuring: Crisil Canada Inc set up in 2025 → clearly targeting North American clients.
M&A: Acquired Bridge To India (renewables consulting) in 2024 → ESG + green infra focus.
ESG Ratings: Got SEBI nod in 2024 to start ESG Ratings — soon you’ll be rated not just on balance sheet, but also whether your office uses paper cups or plastic.
Line of Credit: USD 30m LOC approved for UK unit in Sept 2025 → expansion war chest.
Question: Do ESG ratings mean CRISIL will one day downgrade a company for using plastic chai cups?
7. Balance Sheet (₹ Cr)
Source table
Year
Assets
Liabilities
Net Worth
Borrowings
FY21
2,207
895
1,305
0
FY22
2,504
793
1,571
132
FY23
2,831
956
1,785
83
FY24
3,297
1,061
2,182
47
FY25
3,942
1,127
2,558
298
Auditor sarcasm: Almost debt-free, but suddenly ₹298 Cr borrowings in FY25. Did someone at HQ swipe the corporate card too often?
8. Cash Flow – Sab Number Game Hai
Source table
Year
CFO
CFI
CFF
Net Cash
FY23
456
-59
-368
29
FY24
780
-326
-408
47
FY25
765
-387
-442
-64
Commentary: Healthy CFO, but free cash flow eaten by capex + dividends. CMP/FCF = 63x. That’s not a valuation, that’s a ransom.
9. Ratios – Sexy or Stressy?
Source table
Ratio
FY23
FY24
FY25
ROE %
30
30
28
ROCE %
41
41
36
OPM %
28
28
29
Debt/Equity
0.02
0.02
0.11
Verdict: Sexy returns, stressy valuation.
10. P&L Breakdown – Show Me the Money
Source table
Year
Revenue
EBITDA
PAT
FY23
2,769
882
658
FY24
3,140
911
684
FY25
3,381
982
728
Comedy: Growing ~7–8% annually. Which begs the question — why is it priced like a tech stock growing 25%?
11. Peer Comparison
Source table
Company
Revenue (₹ Cr)
PAT (₹ Cr)
P/E
CRISIL
3,381
728
50x
ICRA
1,046
214
37x
CARE
364
123
22x
Sarcasm: CRISIL is the IIT-IIM topper charging ₹25 lakhs salary, ICRA is the Tier-2 MBA charging ₹12 lakhs, and CARE is the distance MBA asking ₹6 lakhs.
12. Shareholding & Promoters
Source table
Category
% Holding
Promoters (S&P Global)
66.6%
FIIs
8.1%
DIIs
12.1%
Public
13.2%
Roast: With S&P holding two-thirds, CRISIL is less “Indian independent agency” and more “S&P’s offshore back-office with a Dalal Street address.”
13. Corporate Governance – Angels or Devils?
Strong track record — consistent dividend payouts (60%+), zero pledges, clean
