CRISIL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | CRISIL | Market Cap | 34,095 Cr. | Current Price | 4,668 ₹ | High / Low | 6,330 ₹ |
| Stock P/E | 51.0 | Book Value | 271 ₹ | Dividend Yield | 0.54 % | ROCE | 39.0 % |
| ROE | 36.5 % | Face Value | 1.00 ₹ | DMA 50 | 4,584 ₹ | DMA 200 | 4,813 ₹ |
| Chg in FII Hold | -0.14 % | Chg in DII Hold | -0.08 % | PAT Qtr | 137 Cr. | PAT Prev Qtr | 194 Cr. |
| RSI | 54.8 | MACD | 27.0 | Volume | 81,356 | Avg Vol 1Wk | 44,390 |
| Low price | 3,894 ₹ | High price | 6,330 ₹ | PEG Ratio | 4.68 | Debt to equity | 0.12 |
| 52w Index | 31.8 % | Qtr Profit Var | -31.7 % | EPS | 91.3 ₹ | Industry PE | 29.1 |
💹 Financials: CRISIL demonstrates strong efficiency with ROE at 36.5% and ROCE at 39.0%, reflecting excellent capital productivity. Debt-to-equity at 0.12 indicates a low leverage structure, enhancing financial stability. However, quarterly PAT declined from 194 Cr. to 137 Cr., showing a -31.7% drop, which raises concerns about earnings consistency. EPS at 91.3 ₹ highlights strong earnings power.
📊 Valuation: The stock trades at a P/E of 51.0, significantly higher than the industry average of 29.1, suggesting premium valuation. The P/B ratio is ~17.2 (4668/271), which is steep. PEG ratio of 4.68 indicates valuations are stretched relative to growth. Dividend yield at 0.54% is modest, offering limited income return.
🏢 Business Model & Advantage: CRISIL operates in credit ratings, research, risk, and advisory services. Its competitive advantage lies in strong brand recognition, global credibility, and leadership in credit ratings in India. Demand is supported by financial market growth, regulatory requirements, and increasing reliance on independent ratings and analytics.
📈 Overall Health: Financially robust with strong return ratios and minimal debt, though earnings volatility is a concern. RSI at 54.8 suggests neutral momentum, while MACD at 27.0 indicates bullish sentiment in the short term. Long-term fundamentals remain intact, supported by brand strength and sectoral demand, though valuations are demanding.
🎯 Entry Zone: Attractive entry around 4,400–4,600 ₹ range, near DMA 50 support levels. Current price of 4,668 ₹ is slightly above fair value. Long-term investors may accumulate gradually, but caution is advised due to premium valuation multiples.
Positive
- Strong ROCE (39.0%) and ROE (36.5%) indicate superior capital efficiency.
- Low debt-to-equity ratio (0.12) ensures financial stability.
- Leadership position in credit ratings and research services.
- Strong brand recognition and global credibility.
Limitation
- High P/E (51.0) compared to industry average (29.1).
- High P/B ratio (~17.2) suggests stretched valuation.
- PEG ratio of 4.68 indicates expensive valuation relative to growth.
- Dividend yield at 0.54% offers limited income return.
Company Negative News
- Quarterly PAT declined from 194 Cr. to 137 Cr., showing earnings pressure.
- FII holdings decreased by -0.14% and DII holdings by -0.08%, reflecting reduced institutional support.
Company Positive News
- Strong brand recognition and leadership in credit ratings.
- EPS of 91.3 ₹ highlights strong earnings power.
- MACD positive indicates short-term bullish sentiment.
Industry
- Credit rating and research industry benefits from financial market growth and regulatory reliance.
- Industry P/E at 29.1 indicates CRISIL trades at a premium valuation compared to peers.
Conclusion
CRISIL remains a fundamentally strong company with robust profitability, superior return ratios, and strong brand equity. However, high valuations and recent earnings decline limit upside potential. Entry around 4,400–4,600 ₹ is advisable for long-term investors, with cautious accumulation recommended given premium multiples.