Analyst Meet / AGM     20-Apr-24
Conference Call
Focus is to grow margins across all businesses on a consistent basis

CRISIL conducted a conference call on 19 April 2024 to discuss the financial results for the quarter ended March 2023 and prospects. Amish Mehta, MD&CEO addressed the call:


The company has demonstrated resilience and created significant impact through its work and sustainability efforts. The trinity of integrity, insight and impact has given a winning edge to the company in the market.

The company operates in 12 countries and has a strong employee base of 4600 employees comprising 39% women and 40 nationalities.

The company has recently set up a delivery center in Colombia for North American clients which has augmented global delivery model.

The company continues to invest in talent to be future ready.

The company sees the global banks turning cautious with delayed discretionary spending while they continue to focus on operational efficiencies, regulatory compliance and business transformation.

Increased volatility due to macro uncertainties translates to a greater need for enhanced values and actionable insight from benchmarking solutions.

The company is seeing active dialogue around the possibility of leveraging GenAI across industries. The company continues to explore ways to enhance client offerings and internal workflows through the use of GenAI.

Corporate bond insurances grew 9% in Q12024 as against 28% growth for full year 2023.

The company continues to add new clients across businesses and recorded increase in already strong net promoter score from last year.

Bank credit growth was 16.5% driven by demand from retail and services sectors, while large corporate credit was growth was steady at 6.6%.

Overall the medium-term growth prospect for India is expected to be healthy thanks to strengthened corporate balance sheet, a robust banking system, government capex focus and broad basing of private investments.

Crisil ratings consolidated market leadership position with healthy revenue growth during the quarter given the investor preference for best-in-class ratings.

Global analytical center continues to strengthen its support to S&P global in newer areas.

The research analytics and solution segment saw traction in credit risk data and analytics and consulting Offerings for Market Intelligence & Analytics (MI&A).

Global businesses saw the impact of slowdown in discretionary spending by global financial institutions.

Global Research & Risk Solutions (GR&RS) business witnessed momentum in lending solutions and regulatory support and the business added new logos during the quarter.

Global Benchmarking Analytics (GBA) business continued to strengthen client engagement through new benchmarking solutions.

Investments in digital technology, digital capabilities, talent and new solutions and franchise activities continued well during the quarter.

The revenue growth momentum for Q12024 was impacted by slow performance in one of global businesses in the research analytics and solution segment. The high base with strong revenue growth of 20.2% in Q1 last year also impacted the revenue growth in Q1 of 2024.

PBT was flat, but PAT declined 5.5% due to increase in the tax rates.

Rating Business

There are two main drivers of the revenue pools for the rating agencies in India - corporate bond market and bank credit growth.

The company has market share of 60-70% in the bonds rating

On the corporate bonds side, the issuers and the capital market investors are awaiting a decisive turnaround in the interest rate outlook for the market to pick up in the coming year.

Bank credit grew by strong 6.3% in Q1 of 2024 supported retail and service sectors. However, the large corporate segment growth remains lackluster.

Crisil Ratings estimates growth rate for bank credit at 14% and NBFC sector at 15 to 17% in FY2025.

So the company anticipates the capital market issuances to remain sluggish in the near term due to the prevailing high interest rate conditions.

The company anticipates the capital market issuance to revive in H2 of 2024 with softening interest rates and gradual revival of private sector capex.

The company is seeing rating segment revenue growth largely coming from surveillance fee and new rating revenues from mid corporates in Q1 of 2024.

The company continued focus on client engagement initiatives and strengthened leadership position.

Global Analytical Center saw robust surveillance work delegation from S&P global rating services.

Overall the rating segment grew by about 8.4% in Q1 of 2024.

Market Intelligence & Analytics (MI&A)

The drivers for MI&A business are loan growth, financialization of savings and capital formation.

The company is working very closely with banks across the entire loan life cycle by from opportunity identification to origination, credit assessment and risk monitoring

Research insights and data directly feed into the bank''s internal workflow systems and the upskilling solutions provided by Crisil One Academy (training vertical) help ramp up call teams and improve efficiency and efficacy.

Banks are also looking at digitization and automation as a way to drive growth and operational efficiency leading to demand for Crisil’s integrated credit platform that connects data and automates the entire credit life cycle.

Similarly financialization of savings has led to a higher demand for innovative products from the investor community. This has sparked demand for services around indices valuations, benchmarking, risk management etc to be delivered via a digital platform.

The company expects capital investments to fire on both cylinders over the next few years that both infrastructure and industrial investments are set to increase.

The company is seeing industrial sectors pick up pace with investments flowing towards both conventional and the emerging sectors. In parallel infrastructure capex is maintaining its growth momentum.

On the infrastructure side, the company continues to build on a strong franchise working with all the key stakeholders - the implementing agencies, infrastructure companies, tenderers, investors etc.

Within the industrial capex, healthy corporate balance sheets and decadal high utilization rates across most sectors are driving capital investments.

The policy interventions such as the PLI scheme is helping bring in large scale investments in emerging sectors such as electronics, semiconductors, solar PV modules, EVs etc.

The company expects about 1.82 lakh crore of PLI incentives to be paid across 14 sectors to generate revenue of close to Rs 30 lakh crore and capital spending of Rs 3.2 lakh crore.

Emerging sectors are expected to account for about a fifth of the total industrial investments over the next four years.

The company is building data and analytics capabilities in emerging sectors to be able to help both corporates as well as financial institutions make the right investment decisions in these growth areas.

Global Benchmarking Analytics (GBA) business

The revenue pools of the global banks have largely stagnated over the past year. The regulatory environment and broader inflationary trends have put pressure on banks profitability.

This has in turn increased the banks focus on controlling discretionary spending with that background the company have still managed to generate strong progress in the global benchmarking and analytics division

The company anticipates a modest recovery in this area into 2024.

The company has increased penetration with the global banks. It has seen success in expanding offerings into tier 2 and commercial banks globally.

The company has seen a strong performance in 2023 laying a foundation for a continued growth.

Global Research & Risk Solutions (GR&RS) business

Global macroeconomic solution situation remained complex in 2023. World growth was higher than expected, but inflation was above target for many central banks

The operating environment was characterized by the failure of a few regional banks in the US and the consolidation of large European banks.

The GR&RS business witnessed robust performance in 2023 despite these headwinds.

The business saw increased customer engagement in areas such as regulatory compliance, stress testing initiatives and lending solutions.

Traditional sale side research faced cost cutting pressures, while the buy side witnessed strong traction.

There was sustained demand for ESG integration and monitoring services. The company has applied for the ESG license and its awaiting feedback from SEBI.

Overall, the business added 29 new logos in 2023.

While the company saw the impact of curtailed discretionary spending in Q1 of 2024, to maximize revenue in the current year and to build a broader revenue base for the future the company have amplified focus on getting into new buying centers in existing accounts.

The company continued to see the momentum of new logo additions including adding a large asset manager into client portfolio

The company continues to focus on expanding reach to tier 2 and tier three institutions through partnership channels.

The company is using GenAI traditional AI and machine learning techniques to develop new offerings as well as to create efficiencies in the delivery of core services.


The effect of higher Interest rates resulted in growth slowdown in major economies with the notable exception of US and India

As the company head into 2024, major central banks across the world appear on the verge of loosening their monetary policies by varying degrees.

Geopolitical headwinds are becoming stronger due to ongoing war between Israel and Hamas which has also led to red sea crisis affecting one of the biggest transport corridors in the world. Escalating conflict between Iran and Israel has further heightened the regional tensions. Continued war in Europe is also adding to the uncertainty.

Additionally this year has another geopolitical risk, in the form of elections in more than 60 countries including India and US. The outcome of these elections has potential to impact global business sentiments.

In such an uncertain economic environment, the company is witnessing some of client turning more cautious and prolonging their decision making cycles.

The cyber risk continues to remain very high as threat actors are becoming more sophisticated.

Substantial portion of earning are denominated in foreign currencies and fluctuation in the exchange rates tend to affect the company.
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