CARE Ratings Ltd · NSE:CARERATING
CARE Ratings — Q1 FY14 Earnings Presentation
27 slides from CARE Ratings's earnings presentation, August 2013
Slide 1: Celebrating Two Decades of Analytical Excellence
Celebrating Two Decades of Analytical Excellence
Slide 2: CARE Ratings Q1 FY14 Results Presentation
CARE Ratings Q1 FY14 Results Presentation
Slide 3: Brief Snapshot
Brief Snapshot Second Largest Rating Company in India(1) Recurring Nature of Rating Business High Margins & Profitability International expansion Wide Sectoral Coverage Diversified Business Mix (1) In terms of rating income FY13 External Rating Committee 3
Slide 4: Diversified Business Mix
Diversified Business Mix 1. Ratings – Manufacturing & Services sector – Finance sector – Small & Medium Enterprises – Structured Finance 2. Research & Gradings – Industry & Customized Research reports – CARE Industry Risk Metrics (CIRM) reports – Grading services – Training – Valuations 4
Slide 5: Diversified Business Mix contd....
Diversified Business Mix contd.... 3. International expansion – Started operations in Maldives – JV partner for setting up international rating agency – ARC Ratings – Other markets 4. CARE Kalypto – Risk Solutions for • Basel II, Credit risks, Operational risks, Fund Transfer Pricing, Asset Liabilit
Slide 6: Performance overview
Performance overview A=8 Ratings Professional Risk Opinion 6
Slide 7: Key takeaways
Key takeaways • Top line growth of 39.7% • Rating revenue growth of 25.3% • Substantial expansion of debt volumes in both bank facilities and debt segments • PBDT margins at 61.5% and PAT margins at 48.3% • 596 new clients added during Q1FY14 • Interim dividend announced of Rs. 6 per share (Face val
Slide 8: Financial Performance – Q1 FY14
Financial Performance – Q1 FY14 Rs. Crore Q1 FY13 Q1 FY14 Growth (%) Rating Revenue 27.50 34.45 25.3 Other Revenue 0.04 0.23 475.0 Total revenue 27.54 34.68 25.9 Other income 8.45 15.61 84.7 Total income 35.99 50.29 39.7 Employee cost 11.96 15.16 26.7 Other expenses 2.76 4.19 51.8 Depreciation 0.45
Slide 9: Income and Expenditure
Income and Expenditure 50 50.29 19.88 20 40 15.17 35.99 15 Rs. crore Rs. crore 30 10 20 5 10 0 0 Q1 FY13 Q1 FY14 Q1 FY13 Q1 FY14 Total Income Total Expenditure -Total income increased by 39.7%, while total expenditure by 31.0% -Higher volumes of debt rated contributing to growth -Other income up due
Slide 10: Profitability
Profitability Rs. crore Rs. crore 32 30.93 25 24.30 20 24 21.28 16.80 15 16 10 8 5 0 0 Q1 FY13 Q1 FY14 Q1 FY13 Q1 FY14 PBDT PAT PBDT increased by 45.3%, while PAT by 44.6% 10
Slide 11: Profit Margins – PBDT & PAT
Profit Margins – PBDT & PAT 62 61.5 50 48.3 59.1 48 46.7 58 46 44 54 42 50 40 Q1 FY13 Q1 FY14 Q1 FY13 Q1 FY14 PBDT Margins % PAT Margins % Both the PBDT and PAT margins witnessed an improvement in Q1 FY14 11
Slide 12: Business Profile
Business Profile A=e Ratings Professional Risk Opinion 12
Slide 13: No of Assignments
No of Assignments 1500 1,484 1400 1,361 1300 1200 Q1 FY13 Q1 FY14 Total number of assignments increased by 9.0% to 1,484 in Q1 FY14 13
Slide 14: Break up - Number of Assignments
Break up - Number of Assignments Q1FY13 Q1FY14 16 10 1% 1% 213 204 61 14% 57 16% 4% 4% 1081 1203 79% 81% Bank Facilities Debentures / Bonds Bank Facilities Debentures / Bonds Short Term Others Short Term Others 14
Slide 15: Bank Facilities & Debentures/Bonds
Bank Facilities & Debentures/Bonds 1,203 62 1200 61 61 1150 60 59 1100 1,081 58 57 57 1050 56 1000 55 Q1 FY13 Q1 FY14 Q1 FY13 Q1 FY14 Bank Facilites Debentures/Bonds No of bank Facilities rated saw an increase of 11.2% while the number of debentures rated Increased by 7.0% 15
Slide 16: Volume of Debt Rated
Volume of Debt Rated 235,893 240000 180000 139,817 136,389 Rs cr 120000 82,956 76,429 56,765 60000 0 Bank Facilities Debentures/ Bonds Total Q1 FY13 Q1 FY14 Volume of debt rated increased in both bank facilities and debenture/bond segments 16
Slide 17: Economic Backdrop
Economic Backdrop A=e Ratings Professional Risk Opinion 7
Slide 18: Gross Domestic Product
Gross Domestic Product 10 9.3 8.6 8 6.7 6.2 6 5.0 % 4 2 0 FY09 FY10 FY11 FY12 FY13 FY14 GDP Prospects Budget – GoI – 5.5% - RBI – 5.5% CARE 5.4% 6.7%-6.9% 6.0% 18
Slide 19: Economy round up so far - Positives
Economy round up so far - Positives Cumulative rainfall (1st Area under cultivation June to 31st July): Actual improved: As on 26th 528.1 mm, Normal July total area under 452.4 mm and cultivation 747.78 lk Departure +17% hectare (635.05) Inflation under control: WPI inflation moderated to 4.78% in Q
Slide 20: Economy round up so far - Negatives
Economy round up so far - Negatives RBI tightened liquidity: increased the MSF rate to 300 Rupee depreciating: declined by bps above repo rate i.e. 10.25%, 9.8% in Q1 FY14 LAF auctions to be 0.5% of NDTL, banks required to maintain CRR balance of 99% IIP growth stagnant: 0.1% Apr – May FY14 (0.6%) G
Slide 21: Financial Performance for past 5 years
Financial Performance for past 5 years 21
Slide 22: Strong Financial Position and Profitability
Strong Financial Position and Profitability Total Income EBIDTA (Rs. crore) (Rs. crore) 250 200 227 206 163 200 151 177 150 136 154 126 150 100 103 83 100 50 50 0 0 FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13 22
Slide 23: Strong Financial Position and Profitability
Strong Financial Position and Profitability Profit After Tax Dividend per share of Rs. 10 Margin 54% 57% 51% 52% 50% Payout Ratio 6.67% 6.39% 7.90% 30.85% 58.72% 150 25.00 20.00 120 113 20.00 108 91 87 (Rs. per share) 90 15.00 (Rs. crore) 10.00 60 55 10.00 6.50 5.00 30 5.00 4.00 0 0.00 FY09 FY10 FY1
Slide 24: Key Ratios
Key Ratios Return on Networth Book Value Per Share Earnings Per Share (%) (Rs.) (Rs.) 50% 160 45 148.46 39.69 40 140 37.66 40.3% 132.08 39.8% 40% 35 120 31.82 30.53 106.03 30 30.0% 28.5% 100 30% 26.7% 25 80 76.70 19.39 20 20% 60 48.14 15 40 10 10% 20 5 0% 0 0 FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11
Slide 25: Key sector challenges ahead
Key sector challenges ahead 25
Slide 26: Sector challenges ahead
Sector challenges ahead • Economic growth low presently – Bank credit and debt markets subdued and need to recover fast • Interest rates will be lowered once the rupee stabilizes • Investment of Rs. 1.5 lkh crore on infrastructure projects as announced by FM – This can provide boost to the debt mark
Slide 27: Thank you
Thank you A=8 Ratings Professional Risk Opinion 27