CRISIL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.1

📊 Core Financials

• Quarterly PAT declined from 194 Cr. to 137 Cr. (-31.7%), showing short-term earnings pressure.
• ROE at 36.5% and ROCE at 39.0% indicate excellent profitability and capital efficiency.
• Debt-to-equity ratio of 0.12 reflects a very low leverage structure.
• Dividend yield at 0.59% provides modest shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 48.0 vs Industry PE of 29.3 → Overvalued compared to peers.
• P/B Ratio: Current Price / Book Value ≈ 16.2 → Expensive relative to assets.
• PEG Ratio: 4.40 → Suggests slower earnings growth relative to valuation.
• Intrinsic Value Zone: ₹3,900–₹4,200 (near 52-week low and below DMA 200).

🏭 Business Model & Competitive Advantage

• Core operations in credit ratings, research, risk advisory, and analytics.
• Strong brand recognition and leadership in credit rating services in India.
• Competitive advantage lies in intellectual capital, regulatory credibility, and diversified service offerings.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive accumulation between ₹3,900–₹4,200.
• Long-Term Holding: Strong candidate for investors seeking exposure to financial services and analytics, but valuation risks remain.

✅ Positive

• Excellent ROCE (39.0%) and ROE (36.5%).
• Debt-free structure (Debt-to-equity 0.12).
• Strong brand leadership in credit ratings and research.
• Increase in DII holdings (+0.11%).

⚠️ Limitation

• High P/E ratio (48.0) compared to industry average.
• P/B ratio of 16.2 suggests expensive valuation relative to assets.
• PEG ratio of 4.40 indicates slower growth outlook relative to valuation.
• Dividend yield at 0.59% is modest.

📉 Company Negative News

• Quarterly PAT decline (-31.7%).
• Reduction in FII holdings (-0.27%).

📈 Company Positive News

• EPS at ₹91.3 indicates strong earnings base.
• Increase in domestic institutional investor confidence (+0.11%).
• Strong fundamentals with low leverage.

🌐 Industry

• Financial services and credit rating sector driven by regulatory demand and capital market growth.
• Industry PE at 29.3 indicates moderate valuation compared to CRISIL’s premium.
• Sector outlook supported by rising demand for risk management and analytics services.

🔎 Conclusion

• CRISIL is financially strong with excellent efficiency metrics but currently trades at a premium valuation.
• Best suited for long-term investors seeking exposure to credit ratings and analytics.
• Accumulation recommended near ₹3,900–₹4,200 for favorable risk-reward balance.