The stocks of market mavens of Dalal Street are widely tracked by investors. Shares of CRISIL, a part of Big Bull’s portfolio, surged 12 per cent to hit an intraday high of Rs 3,222.25 on BSE after the firm reported its earnings for the quarter ended September 2021.
The stock ended 9.62 per cent higher to Rs 3,149.30 against the previous close of Rs 2,872.95 on BSE. With a market capitalisation of more than Rs 22,000 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The company reported a profit of Rs 112.86 crore for the quarter ended September 2021 as against a net profit of Rs 90.23 crore in the year-ago quarter. The company’s total income rose 16 per cent to Rs 603.80 crore during the quarter.
“We saw strong momentum across our businesses during the quarter. Our focus on customer centricity and domain-led analytics and solutions have helped us grow the core areas. Our new offerings in risk and sustainability have deepened our presence across client segments,” said Amish Mehta, Managing Director & CEO, CRISIL.
“We continue to invest in people and technology to drive growth and be future-ready. While inflation risks persist, there is a continuing expectation of a broad-based economic recovery, both in India and across the world. There is an increased focus on transformation-related spending by global banks,” Mehta added.
Brokerage View
Yes Securities has a ‘Buy’ rating on the stock with a target price of Rs 4,460 per share. The bullish stance is premised on dominant market share in India rating business pie, diversified revenue mix (less-cyclical), improving margins, and robust corporate governance and superior rating performance (better average default rates and stability rates).
“The improvement in company-level operating margin seen during H1 CY21 will continue. CRISIL aspires to revert to its earlier 27-29% margin band in a few years,” the brokerage house said.
“Margin levers will be stronger growth in better-margin services in research segment, revival in domestic rating income growth (most profitable business) and swift turnaround in Greenwich profitability which is expected to break-even in CY21 and has the potential to reach overall research segment margins in a couple of years,” it noted.
It further added that the acquisition of Greenwich Associates in FY20 has further increased the share of non-rating income, completed offerings under benchmarking analytics services and added legs to overall growth.
Big Bull stake
According to the shareholding pattern for September 2021, Rakesh Jhunjhunwala holds a 2.89 per cent stake or 21,06,750 shares in the company. Big Bull’s wife Rekha Jhunjhunwala holds 2.57% stake or 18,68,250 shares in CRISIL.
Shares of CRISIL were up 2 per cent during the muhurat trading session. Jhunjhunwala in the recently concluded India Today Conclave shared that his stock buying decisions are solely based on the risk-reward ratios.