CRISIL Q2 FY25: Ratings King, Research Machine, or Just Living Off That “Other Income”?

CRISIL Q2 FY25: Ratings King, Research Machine, or Just Living Off That “Other Income”?

1. At a Glance

CRISIL is back with a ₹843 Cr revenue (+5.7%) and ₹172 Cr PAT (+8.2%) quarter. Declared ₹9/share dividend like clockwork. ROE and ROCE still making other companies jealous. But is its valuation still justified at 64x P/E?


2. Introduction with Hook

If S&P Global and SEBI had a baby in India, it’d be named CRISIL — born to rate, research, and rule.

  • ₹732 Cr TTM PAT
  • ₹636 Cr of that came from other income.
  • ROE? 36.5%
  • OPM? 15.5% — but looks better if you ignore the rating business’s skeleton crew.

CRISIL doesn’t make products. It makes opinions for money, and business is booming. But valuation? That’s where the irony begins.


3. Business Model (WTF Do They Even Do?)

CRISIL operates in 3 verticals:

  1. Ratings (28% of revenue)
    • 51% of profits
    • Margin machine
    • Now housed under a separate subsidiary per SEBI norms
  2. Research (53% of revenue)
    • Clients: global investment banks, asset managers
    • Includes Coalition, which it’s now shutting down in Singapore (only 0.42% of revenue, so no milk was spilt)
  3. Advisory (19% of revenue)
    • Public policy, infrastructure, risk analytics
    • Not the star, but helps with diversification

CRISIL doesn’t just rate — it dictates how India’s risk is priced. Moody’s and S&P are global bosses; CRISIL runs the desi mafia.


4. Financials Overview

FY24 (vs FY23):

  • Revenue: ₹1,628 Cr → ₹1,665 Cr
  • PAT: ₹668 Cr → ₹616 Cr
  • OPM: 21% → 15%
  • Other Income: ₹493 Cr → ₹501 Cr → Now ₹636 Cr (TTM)

Q2 FY25:

  • Revenue: ₹843 Cr (+5.7%)
  • PAT: ₹172 Cr (+8.2%)
  • EPS: ₹26.57
  • Interim Dividend: ₹9/share

They’ve essentially outsourced EBITDA to their treasury income.


5. Valuation

Market Cap: ₹42,423 Cr
TTM PAT: ₹732 Cr
EPS (TTM): ₹100
P/E: 63.7x
Book Value: ₹244 → P/B: 23.8x

Fair Value Range Estimate:

MethodAssumptionFV Estimate
PE 40x (Rich)₹732 Cr PAT₹29,280 Cr → ₹4,870/share
PE 50x (Very Rich)₹732 Cr PAT₹36,600 Cr → ₹6,090/share
DCF (Moderate Growth, Low Capex)12% WACC₹5,200–₹5,600/share

At ₹5,800, it’s at the upper end. Great business, but you’re paying upfront for decades of clean reputation.


6. What’s Cooking – News, Triggers, Drama

Recent Moves:

  • Closing down Coalition Singapore
  • Interim dividend of ₹9/share
  • Other income booming (likely from S&P investments or debt papers)

Triggers:

  • More credit penetration = more SME ratings
  • Increase in ESG/regulatory disclosures = more advisory wins
  • Growing outsourced research demand from global IBs

Risks:

  • High dependence on financial sector health
  • Over-reliance on “other income” → ~87% of PAT comes from it
  • Competition from CARE/ICRA slowly heating up again

7. Balance Sheet

Metric (₹ Cr)FY22FY23FY24
Equity Capital777
Reserves1,0631,4831,779
Borrowings7231227
Investments6669951,263
Total Assets1,6122,0442,603

Key Notes:

  • Debt negligible → mostly working capital
  • Investment portfolio ballooning — again, where other income is born
  • Treasury is now the real growth engine

8. Cash Flow – Sab Number Game Hai

₹ CrFY22FY23FY24
Operating Cash Flow189281320
Investing Cash Flow125148103
Financing Cash Flow-355-397-435
Net Cash Flow-4132-12

Takeaway:
Payout-heavy company → sends most of its cash back to investors via dividends. Respect.


9. Ratios – Sexy or Stressy?

MetricFY23FY24TTM
ROCE56%39%39%
ROE36.5%37%36.5%
Debtor Days846262
OPM21%15%15%
Working Capital Days33-9-9

Verdict:
Return ratios = mint condition. But falling OPM needs watching — is it cyclical or structural?


10. P&L Breakdown – Show Me the Money

₹ CrFY22FY23FY24
Revenue1,4441,6281,665
EBITDA242340251
EBITDA Margin %17%21%15%
PAT371668616
PAT Margin %26%41%37%

CRISIL doesn’t need much to grow. It’s like Infosys but with less code and more Excel sheets.


11. Peer Comparison

CompanyP/EROCEROEOPMCMP/BV
CRISIL63.739%36.5%15%23.8
ICRA32.623%17%30%6.4
CARE Ratings30.930%21%38%5.3

Conclusion:
CRISIL is the most trusted. But you pay a “halo premium” for it.


12. Miscellaneous – Shareholding, Promoters

CategoryDec 22Mar 24Jun 25
Promoters (S&P)66.7%66.6%66.6%
FIIs6.7%7.2%8.1%
DIIs13.0%12.9%12.0%
Public13.6%13.2%13.2%

Key Notes:

  • No promoter drama — S&P Global is THE boss
  • FIIs slowly increasing stake
  • Retail shareholder base growing → 68K holders now

13. EduInvesting Verdict™

CRISIL is a low-risk, high-reputation cash cow that doesn’t need to do much to justify its seat. But if you strip away the treasury returns, core business is growing modestly at best.

  • Rating monopoly? Yes.
  • Operating leverage? Slowing.
  • Over-reliance on other income? Absolutely.

Verdict:
CRISIL is like that Ivy League kid who always tops the class — but you’re wondering if they’ll ever build a unicorn or just stay a glorified academic.


Metadata
– Written by EduInvesting Team | 22 July 2025
– Tags: CRISIL, Ratings, Research, S&P Global, Dividend Stocks, Q2 FY25, EduInvesting Premium

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