Q2-FY16 and H1-FY16 Financial Results D. R. Dogra MD & CEO
Disclaimer
Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, economic developments, and many other factors that could cause the company’s actual results to differ materially from those contemplated by the relevant forward-looking statements. Credit Analysis and Research Ltd. will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Contents
Highlights
Financial & Business Performance
MCR/CDQI
Economic Backdrop
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Highlights : Q2-FY16 • Growth in Financial indicators – Highest ever Rating revenue of Rs 77.66 crore and Operating profit of Rs 54.77 crore – Growth in operating income recorded 5.35% increase in Q2-FY16 over Q2-FY15 – Growth in rating income of 4.81% over Q2-FY15 – Fall in expenditure of 2.98% – Operating profit margin improved to 70.01% from 67.44% in Q2-FY15 – EBITDA margin at 72.06% and PAT margin at 47.05% in Q2-FY16 – 758 new clients added during Q2-FY16
• Business profile – Total Volume of debt rated recorded a significant increase of 13.7% to Rs 2.41 lakh cr in Q2-FY16 as against Rs 2.12 lakh cr in Q2-FY15. – Total number of instruments rated were 1,845. Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Highlights : H1-FY16 • Strong financial performance continues…. Growth in operating income of 8.33% over H1-FY15 Growth in rating income of 7.80% over H1-FY15 Increase in expenditure of 1.31% Operating profit margin improved to 61.47% from 58.80% in HiFY15 – EBITDA margins at 64.52% and PAT margins at 41.99% in H1-FY16 – 1,466 new clients added during H1-FY16 – – – –
• Business profile – Total Volume of debt rated stood at Rs.5.06 lakh crore in H1-FY16 as against Rs. 4.51 lakh crore in H1-FY15. – Total number of instruments rated were 3,251 in H1FY16 against 2,740 in H1-FY15.
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Contents Highlights
Financial & Business Performance
MCR/CDQI
Economic Backdrop
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Financial Performance Rs crore Rating Revenue
Q2-FY15 Q2-FY16 Growth (%)
H1-FY15 H1-FY16 Growth (%)
74.09
77.66
4.81
116.51
125.59
7.80
0.17
0.57
242.71
0.43
1.08
151.16
Total Revenue
74.26
78.23
5.35
116.94
126.67
8.33
Other Income
22.69
2.22
-90.19
37.52
5.15
-86.28
Total Income
96.95
80.45
-17.01
154.46
131.82
-14.66
Total Expenses
24.18
23.46
-2.98
48.18
48.81
1.31
EBITDA
74.03
57.97
-21.69
108.95
85.05
-21.94
Operating profit
50.08
54.77
9.37
68.76
77.86
13.24
PAT
52.41
37.85
-27.77
79.00
55.35
-29.94
EBITDA margin
76.36%
72.06%
70.50%
64.52%
Operating Profit margin
67.44%
70.01%
58.80%
61.47%
PAT Margin
54.06%
47.05%
51.14%
41.99%
Other operating Revenue
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Financial Performance : Q2-FY16 Total Expenditure 25
78 Rs. Cr.
Rs. cr.
Total Revenue 80 78 76 74 72
Rs. crore
74
24
24 23
24 23
Q2 FY15
Q2 FY15
Q2 FY16
Operating Profit 56
PAT 55
60
52
Rs. Cr.
Rs. Cr.
54 52
Q2 FY16
50
50
38
40 20
48
0
46 Q2 FY15
Q2 FY16
Q2 FY15
Q2-FY16 & H1-FY16 Analyst Presentation
Q2 FY16 November 3, 2015
Financial Performance : Q2-FY16 Operating profit margin (%) Q2-FY16 Operating profit margin increased to
71% 70% 70%
70% mainly due to reduction in cost &
69%
increase in volume of new debt rated by
68%
13.68%.
67%
67% 66% Q2 FY15
Q2 FY16
PAT Margin (%)
Q2-FY16 PAT margin stood at 47% reduced from
55%
54% mainly due to lower investible surplus and
50%
also most investments in FMPs for a tenure of
54% 47%
45%
three years, income on which can be booked only on maturity.
40% Q2 FY15 Q2-FY16 & H1-FY16 Analyst Presentation
Q2 FY16 November 3, 2015
Financial Performance : H1-FY16 Total Revenue 130
Total Expenditure
Rs. Cr.
Rs. Cr.
49
49
127
125 120
Rs. crore
117
115
49
48
48 48
110 H1FY15
H1FY15
H1FY16
PAT
Operating Profit 80
78
Rs. Cr.
Rs. Cr.
75 70
69
65 60 H1FY15
H1FY16
H1FY16
100 80 60 40 20 0
79 55
H1FY15
Q2-FY16 & H1-FY16 Analyst Presentation
H1FY16 November 3, 2015
Financial Performance: H1-FY16 Operating Profit Margin (%) 62%
61%
61% mainly due to lower expenditure &
61%
increase in volume of new debt rated by
60% 59%
H1FY16 Operating profit margin increased to
59%
12.20%.
58% 57% H1FY15
H1FY16
PAT Margin (%) H1FY16 PAT margin reduced to 42% from 51%
60%
42%
mainly due to lower investible surplus and also
40%
most investments in FMPs for a tenure of three
20%
years, income on which can be booked only on
0%
maturity.
51%
H1FY15
Q2-FY16 & H1-FY16 Analyst Presentation
H1FY16
November 3, 2015
Business Performance Total Active clients 11,200 11,000 10,800 10,600 10,400 10,200 10,000 9,800 9,600 9,400 9,200
10,950
10,332 9,828
Mar'15
Jun'15
Sept'15
* end of period data Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Business Performance: Q2-FY16 Volume of debt rated
Rs. Lkh crore
3 2.5
2.12
2.41
2 1.5
1.17 1.24
1
0.74
0.97
0.5
0.21 0.20
0 Bank Loan Ratings
Long term
Q2FY15
Short & Medium term
Total
Q2FY16
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Business Performance: Q2-FY16 No. of Instruments rated 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0
1,845 1,656 1,466 1080 455 272
Bank Loan Ratings
88 80
33 27
Long term
Short & Medium term
Q2FY15
others
Total
Q2FY16
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Business Performance: H1-FY16 Volume of debt rated 6 5.06 Rs. Lkh crore
5
4.51
4 3 2
2.01 2.04
2.11
2.56
1
0.39 0.46
0 Bank Loan Ratings
Long term
H1FY15
Short & Medium term
Total
H1Y16
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Business Performance: H1-FY16 No. of Instruments rated 3,500 3,000 2,500 2,000 1,500 1,000 500 0
3,251 2,740
2,419 1,799 751 651
Bank Loan Ratings
135 129
55 52
Long term
Short & Medium term
H1FY15
Others
Total
H1FY16
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Contents Highlights
Financial & Business Performance
MCR/CDQI
Economic Backdrop
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Ratings Movements Credit quality of domestic rated firms/entities remained the same during the year H1FY16 as indicated by the MCR. The Modified Credit Ratio (MCR) remained unchanged at 1.11 in H1-FY16 compared to H1-FY15.
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
CARE Ratings Debt Quality Index The CDQI dropped by 0.48 points in July’15. However, the decline in the subsequent months moderated to 0.40 points and 0.01 point for Aug’15 and Sept’15 respectively. This downward movement in the index clearly indicates the deteriorating quality of debt over the past few months.
Movement in CDQI -Mar'12 to Sept'15 101 100 100 99 99.48 98 97 96 95 94 93 92 91 90 89 88
96.08 93.91 92.54
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Contents Highlights
Financial & Business Performance
MCR/CDQI
Economic Backdrop
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Economic Backdrop Reviving Industrial Growth (AprAug’15)
GDP growth expected at 7.5 -7.6% for FY16 vis-a-vis 7.3% in FY15 9
8.4 7.5
8 7
6.7
6.6
7.0
5
%
%
6 4 3 2 1 0 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16
5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0
4.4
4.2
3.0 2.1
FY15
IIP (5 mths)
Q2-FY16 & H1-FY16 Analyst Presentation
FY16
Core (5 mths)
November 3, 2015
Economic Backdrop…. (contd.) Depreciating exchange rate
Easing Inflation
6.0
4.9
5.0
5.4 3.7
4.4
3.7
62
4.0
62.5 63
0.0
-2.0 -4.0
63.42
63.65
63.5 Rs/$
%
2.0
-2.43
-2.20
64
63.76
64.5
-2.13
65
-4.00 -6.0
-4.95
-4.45
65.5 66
CPI
65.08
65.67
WPI
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Economic Backdrop…. (contd.) Increased CP Issuances
Lower growth in demand for credit 0.9
600,000
0 -1
Credit
Industry -0.7 -1.3
-2 FY15 (Apr-Aug'14)
Services
552,190
400,000 200,000
-1.8 -1.6
0
FY16 (Apr-Aug'15)
H1 FY15
H1 FY16
Corporate Debt raised 300,000 Rs. crore
%
1
1.3
743,090
800,000 Rs. Crore
2
242,720
200,000 100,000
145,291 4,418
244,758 149,709
2,038
0 Public Issue
Private Placement
H1FY15
Total
H1FY16
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Economic Backdrop…. (contd.)
Repo rate
Base rate
364- CP rate
10-yr G-sec Yield
* As on 23rd Oct’15
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015
Oct-15*
Aug-15
Jun-15
Apr-15
Feb-15
Dec-14
Oct-14
Aug-14
Oct-15
7.25 6.75
Jul-15
7.50
Apr-15
Jan-15
7.75
11 10.5 10 9.5 9 8.5 8 7.5 7 6.5 6 Apr-14
%
9.8 9.7 9.7
Oct-14
Jul-14
Apr-14
10.50 10.00 9.50 10.0 9.00 8.50 8.00 % 7.50 8.00 7.00 6.50 6.00 5.50 5.00
10-yr G-sec yield & 364-CP rate
Jun-14
Repo Rate & Base rate (%)
Thank You
Q2-FY16 & H1-FY16 Analyst Presentation
November 3, 2015