Slide 1: CRISIL's 2016 Results Analyst Meet
CRISIL’s 2016 Results Analyst Meet February 17, 2017 © 2017 CRISIL Ltd. All rights reserved.
Slide 2: Disclaimer / Safe Harbor
Disclaimer / Safe Harbor This presentation has been prepared solely for use at the investor/analyst presentation. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: (a) CRISIL Ltd. (“CRISIL” or “Company
Slide 3: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas Strong fundamentals and sustained returns to shareholders © 2017 CRISIL Ltd. All rights reserved. Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 4: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 5: CRISIL is a global analytics company
5 CRISIL is a global analytics company © 2017 CRISIL Ltd. All rights reserved.
Slide 6: Driven by its mission and core values
Driven by its mission and core values Mission To make markets function better by providing independent © 2017 CRISIL Ltd. All rights reserved. opinions, actionable insights, and efficient solutions Core values 6
Slide 7: Unparalleled analytics underpins ratings, data, research, and solutions
Unparalleled analytics underpins ratings, data, research, and solutions 23,000+ large and mid-scale corporates and financial India’s leading rating agency institutions; 100,000+ SME ratings assigned to date 90% of India’s banking industry © 2017 CRISIL Ltd. All rights reserved. India's largest indep
Slide 8: Strengths, rigor and distinctive capabilities power our analytics
Strengths, rigor and distinctive capabilities power our analytics India and emerging markets Developed markets • Leading brand, independent voice and first • Leading provider of research and point of contact for regulators, policy makers analytics with deep domain and industry associations for capit
Slide 9: Agility and innovation are central to our culture
Agility and innovation are central to our culture Ratings Research Advisory Rated India’s first CRISIL Inclusix Index Launched early warning commercial mortgage system for portfolio backed security Transaction banking monitoring at banks analytics for global Rated the first inflation corpo
Slide 10: We are a leading voice in the market
We are a leading voice in the market © 2017 CRISIL Ltd. All rights reserved. 1. BRICS seminar on developing the bond markets organized by the Ministry of 6. Ashu Suyash, MD & CEO, CRISIL moderated a panel at the S&P Finance, Government of India and FICCI Global Market Intelligence’s at NYU Stern, Ne
Slide 11: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 12: Long-term trends augur well for CRISIL businesses
Long-term trends augur well for CRISIL businesses India Global Remains a fast growing economy, with Global economy in a better shape, yet improving macro-economic fundamentals challenged by divergent monetary policies Macro trends Credit growth and investment cycle expected Brexit and other
Slide 13: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 14: Strong and sustained financial performance
Strong and sustained financial performance Segment operating revenues ₹ crore +12% 1,547 1,253 1,380 1,111 76 978 63 66 55 56 1,004 645 745 880 526 396 410 445 434 468 © 2017 CRISIL Ltd. All rights reserved. Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Ratings Research Advisory Profit before tax ₹ crore +11%
Slide 15: Increasing revenue per employee
Increasing revenue per employee Revenue per employee* 3,856 3,629 3,424 3,454 3,329 © 2017 CRISIL Ltd. All rights reserved. 40 38 36 32 29 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Revenue per employee (₹ lakh) Average number of employees during the year *Based on segment revenue 15
Slide 16: Growth across business segments in 2016
Growth across business segments in 2016 Segment Revenues ₹ crore +14% +18% 1,004 -2% +8% 880 745 445 434 468 +4% +15% © 2017 CRISIL Ltd. All rights reserved. 63 66 76 Ratings Research Advisory 2014 2015 2016 Segment Profit ₹ crore +21% +26% 331 -11% +1% 274 217 166 147 148 -65% -39% 7 2 1 Ratings Re
Slide 17: Improved earnings per share in 2016
Improved earnings per share in 2016 EBITDA Diluted EPS ₹ crore +15% 462 +15% © 2017 CRISIL Ltd. All rights reserved. +3% ₹45.3 +6% 388 400 ₹39.5 ₹37.4 31% 30% 29% 2014 2015 2016 2014 2015 2016 EBITDA EBITDA Margins 17
Slide 18: Consistent track record of delivering shareholder returns
Consistent track record of delivering shareholder returns Return to shareholders ₹ crore 69% 71% 63% 59% 53% 45 © 2017 CRISIL Ltd. All rights reserved. 37 40 36 31 +15% 299 102 232 157 170 131 197 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dividends (incl. distribution tax) Dividend payout Buyback EPS Note:
Slide 19: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 20: Broad and deep analytic coverage
Broad and deep analytic coverage © 2017 CRISIL Ltd. All rights reserved. Financial Corporate Securitization Bank Loan Institution SME Ratings Ratings Ratings Ratings ~₹2 trillion rated ~23,000 ratings 100,000+ ratings ~ ₹7000 trillion rated debt quantum till date quantum till date announced announce
Slide 21: The domestic bond market provided a fifth of outstanding funding
The domestic bond market provided a fifth of outstanding funding to India’s corporate sector 61.0 71.3 81.4 92.0 101.6 100% 18.7% 19.6% 19.3% 21.1% 22.4% 80% © 2017 CRISIL Ltd. All rights reserved. 9.4% 10.7% 11.1% 12.1% 12.1% 60% 40% 71.8% 69.7% 69.5% 66.8% 65.5% 20% 0% Mar-12 Mar-13 Mar-14 Mar-15
Slide 22: Bank credit growth has been a challenge
Bank credit growth has been a challenge… Trend in credit growth 20% 18% 16% 14% 12% © 2017 CRISIL Ltd. All rights reserved. 10% 8% 6% 4% 2% 0% Credit growth Wholesale Growth Retail Growth Source: RBI, CRISIL Research Credit growth has been in single digits in the past two years, dipping in Novembe
Slide 23: Debt-weighted credit ratio is yet to fully recover
…and debt-weighted credit ratio is yet to fully recover… Semi-annual trends in the credit ratio and the debt-weighted* credit ratio 2.50 2.13 2.00 1.75 1.64 © 2017 CRISIL Ltd. All rights reserved. 1.50 (times) 1.18 0.91 0.87 0.76 1.00 0.66 0.72 0.76 0.72 0.62 0.59 0.50 0.29 0.61 0.27 0.24 0.20 0.11
Slide 24: Healthy growth in both bond issuances and number of issuers
…however, healthy growth in both bond issuances and number of issuers 6.0 500 4.92 450 5.0 4.51 400 4.33 © 2017 CRISIL Ltd. All rights reserved. 350 4.0 3.52 Rs. lakh crore 300 2.71 3.0 250 200 2.0 150 100 1.0 50 0.0 0 FY13 FY14 FY15 FY16 9MFY17 FIN CGS No. of Issuers (RHS) Source: Prime Database, *
Slide 25: Regulations to provide fillip to the development of the Indian corporate bond market
Regulations to provide fillip to the development of the Indian corporate bond market • Encourage large borrowers to access capital markets for their RBI took the lead in 2016 incremental funding requirements to take pressure off the banking system • Encourage banks to credit enhance bonds to enable
Slide 26: Ratings: 2016 highlights
Our performance has been driven by innovation and analytical excellence Ratings: 2016 highlights CRISIL rated India's first hybrid issuance in the insurance sector Drove Assigned the first rating on an infrastructure investment trust innovation © 2017 CRISIL Ltd. All rights reserved. through new
Slide 27: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 28: Integrated research, risk and analytics services
Integrated research, risk and analytics services India Global Largest independent research house in Equity and Fixed income research support India covering economy, industry, capital Offerings Credit risk support markets Data analytics Fixed income valuations, debt/hybrid © 2017 CRISIL Ltd
Slide 29: Research and analytics remains integral to the strategies of clients
Research and analytics remains integral to the strategies of clients, and their needs are evolving rapidly New opportunities arising due to need for A differentiated investment research in the global markets © 2017 CRISIL Ltd. All rights reserved. Increasing requirements due to regulatory changes B
Slide 30: New opportunities from need for differentiated investment research
A New opportunities arising because of the need for differentiated investment research in the global markets Consistent decline in Global IBs revenue Growth of the Global High Yield Market 351 277 269 265 258 218 152 129 119 110 © 2017 CRISIL Ltd. All rights reserved. 68 64 61 65 56 65 69 76 85 83 2
Slide 31: Increasing requirements due to regulatory changes and evolving risk paradigms
B Increasing requirements due to regulatory changes and evolving risk paradigms Key regulations Description Opportunities Enhancing and validating To assess whether banks have Enterprise risk – CCAR, quantitative risk models (credit sufficient capital to continue risk, market risk, etc) DFAST, E
Slide 32: Strong demand in benchmarking analytics
C Strong demand in benchmarking analytics Corporate & Equity FICC Investment Securities Trade Cash investment sales & sales & banking services finance management banking trading trading division Understanding competitor performance Competitor Benchmark performance by sizing leads / gaps © 2017 CRI
Slide 33: Growing customer preference in India for integrated views and actionable insights
D Growing customer preference in India for integrated views and actionable insights CRISIL’s access to proprietary and public … gives it an edge in … to provide deep and data across economy, industry, company developing analytics, actionable insights through and capital markets… which can be leverag
Slide 34: Research: 2016 highlights
Scaled up analytics/IP offerings across client segments Research: 2016 highlights New offerings in the area of stress testing and model validation Developed new analytics and Opened new opportunities for client additions in buy-side and credit risk research © 2017 CRISIL Ltd. All rights reserved
Slide 35: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 36: Our solutions and services enable risk management and policy making
Our solutions and services enable risk management and policy making Risk Solutions Infrastructure Advisory Provides integrated risk management Provides advisory services across the solutions and services infrastructure development cycle Credit lifecycle management © 2017 CRISIL Ltd. All rights res
Slide 37: Business environment driven by policy, regulatory and technological changes
Business environment continues to be driven by policy, regulatory and technological changes Risk Solutions Infrastructure Advisory Markets Asset quality decline with rising non- Increased government spending on performing asset levels infrastructure in India Leverage big data analytics for A
Slide 38: Advisory: 2016 Highlights
Strengthened presence across segments through expanded suite of offerings Advisory: 2016 Highlights Risk Solutions Infrastructure Advisory Deeper client engagements on Deep engagement and leading Leveraging deep © 2017 CRISIL Ltd. All rights reserved. model development and validation advisor on
Slide 39: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 40: Key risks and challenges
Key risks and challenges Uneven global economic growth Uncertain regulatory environment © 2017 CRISIL Ltd. All rights reserved. Adverse currency movements Reputation risk Intense price competition 40
Slide 41: Agenda
Agenda CRISIL is a global, agile and innovative analytics company Growth driven by opportunities in India and overseas © 2017 CRISIL Ltd. All rights reserved. Strong fundamentals and sustained returns to shareholders Ratings: Drivers and performance Research: Drivers and performance Advi
Slide 42: Summary
Summary CRISIL’s core analytics, culture of agility and innovation, and global presence underpin its mission of making markets function better We are a leading voice in the market and known for our strong thought © 2017 CRISIL Ltd. All rights reserved. leadership We have maintained a consisten
Slide 43: Disclaimer / Safe Harbor
Disclaimer / Safe Harbor This presentation has been prepared solely for use at the investor/analyst presentation. By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: (a) CRISIL Ltd. (“CRISIL” or “Company
Slide 44: Thank you
44 Thank you © 2017 CRISIL Ltd. All rights reserved.