CARE Ratings Ltd · NSE:CARERATING
CARE Ratings — Q2 FY2016 Earnings Presentation
25 slides from CARE Ratings's earnings presentation, Nov 3, 2015
Slide 1: Q2-FY16 and H1-FY16 Financial Results
Q2-FY16 and H1-FY16 Financial Results D. R. Dogra MD & CEO
Slide 2: Disclaimer
Disclaimer Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like government actions, economic developments, and many other factors that could cause the company’s actual results to differ materially f
Slide 3: Contents
Contents Highlights Financial & Business Performance MCR/CDQI Economic Backdrop Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 4: Highlights: Q2-FY16
Highlights : Q2-FY16 • Growth in Financial indicators – Highest ever Rating revenue of Rs 77.66 crore and Operating profit of Rs 54.77 crore – Growth in operating income recorded 5.35% increase in Q2-FY16 over Q2-FY15 – Growth in rating income of 4.81% over Q2-FY15 – Fall in expenditure of 2.98% – O
Slide 5: Highlights: H1-FY16
Highlights : H1-FY16 • Strong financial performance continues…. – Growth in operating income of 8.33% over H1-FY15 – Growth in rating income of 7.80% over H1-FY15 – Increase in expenditure of 1.31% – Operating profit margin improved to 61.47% from 58.80% in Hi- FY15 – EBITDA margins at 64.52% and PA
Slide 6: Contents
Contents Highlights Financial & Business Performance MCR/CDQI Economic Backdrop Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 7: Financial Performance
Financial Performance Rs crore Q2-FY15 Q2-FY16 Growth (%) H1-FY15 H1-FY16 Growth (%) Rating Revenue 74.09 77.66 4.81 116.51 125.59 7.80 Other operating Revenue 0.17 0.57 242.71 0.43 1.08 151.16 Total Revenue 74.26 78.23 5.35 116.94 126.67 8.33 Other Income 22.69 2.22 -90.19 37.52 5.15 -86.28 Total I
Slide 8: Financial Performance: Q2-FY16
Financial Performance : Q2-FY16 Rs. crore Total Revenue Total Expenditure 80 78 25 24 78 24 Rs. cr. Rs. Cr. 76 74 23 74 24 72 23 Q2 FY15 Q2 FY16 Q2 FY15 Q2 FY16 Operating Profit PAT 56 55 60 52 54 38 40 Rs. Cr. Rs. Cr. 52 50 50 20 48 46 0 Q2 FY15 Q2 FY16 Q2 FY15 Q2 FY16 Q2-FY16 & H1-FY16 Analyst Pre
Slide 9: Financial Performance: Q2-FY16
Financial Performance : Q2-FY16 Operating profit margin (%) 71% Q2-FY16 Operating profit margin increased to 70% 70% 70% mainly due to reduction in cost & 69% increase in volume of new debt rated by 68% 67% 13.68%. 67% 66% Q2 FY15 Q2 FY16 PAT Margin (%) 55% 54% Q2-FY16 PAT margin stood at 47% reduce
Slide 10: Financial Performance: H1-FY16
Financial Performance : H1-FY16 Rs. crore Total Revenue Total Expenditure 130 127 49 49 125 49 Rs. Cr. Rs. Cr. 48 120 117 48 115 110 48 H1FY15 H1FY16 H1FY15 H1FY16 Operating Profit PAT 80 78 100 79 80 75 55 Rs. Cr. 60 Rs. Cr. 70 69 40 65 20 60 0 H1FY15 H1FY16 H1FY15 H1FY16 Q2-FY16 & H1-FY16 Analyst
Slide 11: Financial Performance: H1-FY16
Financial Performance: H1-FY16 Operating Profit Margin (%) H1FY16 Operating profit margin increased to 62% 61% 61% mainly due to lower expenditure & 61% 60% increase in volume of new debt rated by 59% 12.20%. 59% 58% 57% H1FY15 H1FY16 PAT Margin (%) 60% 51% H1FY16 PAT margin reduced to 42% from 51%
Slide 12: Business Performance
Business Performance Total Active clients 11,200 11,000 10,950 10,800 10,600 10,400 10,332 10,200 10,000 9,828 9,800 9,600 9,400 9,200 Mar'15 Jun'15 Sept'15 * end of period data Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 13: Business Performance: Q2-FY16 Volume of debt rated
Business Performance: Q2-FY16 Volume of debt rated 3 2.41 2.5 2.12 Rs. Lkh crore 2 1.5 1.17 1.24 0.97 1 0.74 0.5 0.21 0.20 0 Bank Loan Long term Short & Medium Total Ratings term Q2FY15 Q2FY16 Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 14: Business Performance: Q2-FY16 Instruments rated
Business Performance: Q2-FY16 No. of Instruments rated 2,000 1,845 1,800 1,656 1,600 1,466 1,400 1,200 1080 1,000 800 600 455 400 272 200 88 80 33 27 0 Bank Loan Long term Short & others Total Ratings Medium term Q2FY15 Q2FY16 Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 15: Business Performance: H1-FY16 Volume of debt rated
Business Performance: H1-FY16 Volume of debt rated 6 5.06 5 4.51 Rs. Lkh crore 4 3 2.56 2.01 2.04 2.11 2 1 0.39 0.46 0 Bank Loan Ratings Long term Short & Medium Total term H1FY15 H1Y16 Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 16: Business Performance: H1-FY16 Instruments rated
Business Performance: H1-FY16 No. of Instruments rated 3,500 3,251 3,000 2,740 2,419 2,500 2,000 1,799 1,500 1,000 751 651 500 135 129 55 52 0 Bank Loan Long term Short & Others Total Ratings Medium term H1FY15 H1FY16 Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 17: Contents
Contents Highlights Financial & Business Performance MCR/CDQI Economic Backdrop Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 18: Ratings Movements
Ratings Movements Credit quality of domestic rated firms/entities remained the same during the year H1- FY16 as indicated by the MCR. The Modified Credit Ratio (MCR) remained unchanged at 1.11 in H1-FY16 compared to H1-FY15. Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 19: CARE Ratings Debt Quality Index
CARE Ratings Debt Quality Index The CDQI dropped by 0.48 points in July’15. However, the decline in the subsequent months moderated to 0.40 points and 0.01 point for Aug’15 and Sept’15 respectively. This downward movement in the index clearly indicates the deteriorating quality of debt over the past
Slide 20: Contents
Contents Highlights Financial & Business Performance MCR/CDQI Economic Backdrop Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 21: Economic Backdrop
Economic Backdrop GDP growth expected at 7.5 -7.6% Reviving Industrial Growth (Apr- for FY16 vis-a-vis 7.3% in FY15 Aug’15) 5.0 9 8.4 4.4 4.5 4.2 8 7.5 7.0 4.0 7 6.7 6.6 3.5 3.0 6 3.0 5 2.5 % 2.1 % 4 2.0 3 1.5 2 1.0 1 0.5 0 0.0 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 FY15 FY16 IIP (5 mths) Core (5 mths)
Slide 22: Economic Backdrop (contd.)
Economic Backdrop…. (contd.) Easing Inflation Depreciating exchange rate 5.0 5.4 6.0 4.9 4.4 3.7 3.7 4.0 62 62.5 2.0 63 63.42 63.65 % 0.0 63.5 Rs/$ 64 63.76 -2.0 -2.20 -2.13 64.5 -2.43 -4.0 65 65.08 -4.00 -4.45 -6.0 -4.95 65.5 66 65.67 CPI WPI Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015
Slide 23: Economic Backdrop (contd.)
Economic Backdrop…. (contd.) Lower growth in demand for credit Increased CP Issuances 800,000 743,090 2 1.3 0.9 552,190 1 600,000 Rs. Crore 0 % 400,000 Credit Industry Services -1 -0.7 200,000 -2 -1.3 -1.8 -1.6 0 FY15 (Apr-Aug'14) FY16 (Apr-Aug'15) H1 FY15 H1 FY16 Corporate Debt raised 300,000 242,7
Slide 24: Economic Backdrop (contd.)
Economic Backdrop…. (contd.) Repo Rate & Base rate (%) 10-yr G-sec yield & 364-CP rate 10.50 10.00 11 9.50 10.0 10.5 9.8 9.7 9.7 10 9.00 8.50 9.5 8.00 9 % 7.50 8.5 % 8.00 7.75 7.00 7.50 8 7.25 7.5 6.50 6.75 7 6.00 5.50 6.5 5.00 6 Oct-14 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Jun-14 Feb-15 Jun-15 Oct-15*
Slide 25: Thank You
Thank You Q2-FY16 & H1-FY16 Analyst Presentation November 3, 2015