CRISIL Limited has reported a flat financial performance by reporting 11% rise in consolidated total income for the quarter ended June 2010 to Rs1506 mn from Rs1357 mn in June 2009. Margins have declined on account of increased headcount and rental costs. Currently the valuations are steep at 24 times CY10E earnings.
Performance Highlights:
- Revenues from rating services have improved by 17% y-o-y to Rs710 mn. for the quarter ended Q2CY10 as against Rs608 mn.
- Reported net profit declined by 13% y-o-y to Rs333 mn for Q2CY10 v/s Rs383 mn for Q2CY09.
Valuations: At CMP of Rs. 5,845.6/-, CRISIL is quoting at 24x CY10E and 22x CY11E earnings. We have kept our estimates unchanged for CY10 and CY11 and believe that the valuations are stretched. Hence, we maintain our Reduce rating on the scrip.
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