CARE Ratings Ltd · NSE:CARERATING
CARE Ratings — H1 FY2019 Earnings Presentation
22 slides from CARE Ratings's earnings presentation, Nov 2, 2018
Slide 1: H1-FY19 Analyst Presentation
H1‐FY19 Analyst Presentation
Slide 2: CARE Ratings Professional Risk Opinion
daz Ratings Professional Risk Opinion TING gy * Ay ; , 0 q + o x G + of x raiytic?
Slide 3: Safe Harbor Statement
SAFE HARBOR STATEMENT THIS PRESENTATION AND THE ACCOMPANYING SLIDES (THE “PRESENTATION”), WHICH HAVE BEEN PREPARED BY CREDIT RATINGS (THE “COMPANY”), HAVE BEEN PREPARED SOLELY FOR INFORMATION PURPOSES AND DO NOT CONSTITUTE ANY OFFER, RECOMMENDATION OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SECU
Slide 4: CARE Ratings Group
CARE Ratings Group CARE Ratings Limited CARE Risk CARE Advisory CARE Ratings CARE Ratings Solutions Private Research and Training (Africa) Private (Nepal) Limited – Limited – 100% Limited – 100% Limited – 78% 51% 4
Slide 5: Major Factors affecting results of H1-FY19
Major Factors affecting results of H1‐FY19 • Revenue estimate change impact of Rs. 13.87 crore resulting in higher operating income and Rs. 9.98 crore resulting in higher profit after tax has been adjusted in H1 FY18 (PY) column to make the performance comparable with current year in all the slides
Slide 6: Highlights: H1-FY19 (adjusted)
Highlights: H1‐FY19 (adjusted) • Growth in Financial Indicators (Consolidated) – Growth in Operating Income of 10.3% in H1‐FY19 over H1‐FY18 * – Growth in Total Income of 8.9% over H1‐FY18 * – Operating Profit margin at 56.06% and PAT margin at 41.9% in H1‐FY19 * • Growth in Financial Indicators(Sta
Slide 7: Adjusted Financials for analytical comparison
Adjusted Financials for analytical comparison Rs. Lakhs Standalone Consolidated % Change % Change Particulars H1 FY19 H1 FY18 H1 FY19 H1 FY18 Revenue from Operations* 15,101 13,848 9.0% 15,665 14,200 10.3% Total Expenses 5,444 4,717 15.4% 6,166 5,179 19.1% Operating Profit * 9,657 9,131 5.8% 9,499 9
Slide 8: Standalone Financial Performance: H1-FY19 (Adjusted)
Standalone‐Financial Performance:H1‐FY19 (Rs cr)(Adjusted) Total Operating Revenue Operating Profit 155 151.01* 150 100 96.57* 145 95 138.48 91.31 140 90 135 130 85 H1 FY18 H1 FY19 H1 FY18 H1 FY19 Total Expenditure PAT 54.44** 55 76 73.99 50 47.17 74 71.94 45 72 40 70 H1 FY18 H1 FY19 H1 FY18 H1 FY19
Slide 9: Financial Performance: H1-FY19 (Adjusted)
Financial Performance: H1‐FY19(Adjusted) Operating Profit Margin (%) H1 FY19 Operating profit margin stood at 66 65.02 59.20% mainly due to ESOP charges and 64 increase in other expenses. Without the 62 60 59.20 effect of ESOP charges Operating profit 58 margin will be at 63.95%. 56 H1 FY18 H1 FY19
Slide 10: H1FY19 Performance
H1FY19 Performance (As per audited result published in H1 FY19) Rs. Lakhs Standalone Consolidated % Change % Change Particulars H1 FY19 H1 FY18 H1 FY19 H1 FY18 Revenue from Operations 15,101 15,235 ‐0.88% 15,665 15,586 0.50% Total Expenses 5,444 4,717 15.40% 6,166 5,179 19.06% Operating Profit (with
Slide 11: Business Performance: H1-FY19
Business Performance: H1‐FY19 9 4500 Volume of Debt Rated (Rs lk cr) 8.13 No of Instruments Rated 4184 4276 8 4000 3714 7.14 7 3500 6 3000 2691 5 2500 4 3.54 2000 3.36 3 2.75 1500 2.42 1287 1.84 2 1000 1.37 1 500 340 159 63 152 54 0 0 Short & Medium Long term Bank Loan Ratings Total Short & Long ter
Slide 12: Rating Movement
Rating Movement CARE Ratings’ Modified Credit Ratio (MCR) which is defined as the ratio of (upgrades and reaffirmations) to (downgrades and reaffirmations) for H1 FY19 was stable at 1.01 when compared with H1 FY18. It however was lower than the MCR during H1 FY15‐17 (1.04 to 1.17). 1.30 Modified Cre
Slide 13: CARE Ratings Debt Quality Index (CDQI)
CARE Ratings Debt Quality Index (CDQI) CDQI has been showing an improving trend in the nine months ended August 2018. In September 2018, it fell marginally 102 100 98 96 94 91.37 92 90 90.91 88 86 84 82 Sep'17 Sep'18 Sept'12 Sept'13 Sept'14 Sept'15 Sept'16 Mar'12 June'12 Mar'13 Mar'14 Mar'17 Dec'12
Slide 14: Economic Backdrop
Economic Backdrop GDP growth (%) 6.0 IIP growth (%) 5.2 9.0 8.2 5.0 8.0 7.7 7.0 7.0 6.3 4.0 6.0 5.6 5.0 3.0 2.3 4.0 2.0 3.0 2.0 1.0 1.0 0.0 0.0 Q1FY18 Q2FY18 Q3FY18 Q4FY18 Q1FY19 FY18 (Apr‐Aug) FY19 (Apr‐Aug) 14
Slide 15: Economic Backdrop: Inflation and Rupee
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 Apr‐17 3.0 3.8 May‐17 Jun‐17 Jul‐17 Aug‐17 Sep‐17 Oct‐17 CPI (%) Nov‐17 Dec‐17 Jan‐18 Inflation Feb‐18 Mar‐18 WPI (%) Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 3.8 5.1 76.00 74.00 72.00 70.00 68.00 66.00 64.00 62.00 60.00 58.00 56.00 Apr‐17 Jun‐17 64.51 Aug‐17 Oct‐17
Slide 16: Economic Backdrop
Economic Backdrop Incremental Bank credit Growth 4 3.8 3.5 3 2.5 % 2 1.5 1 0.9 0.5 0 H1‐FY18 H1‐FY19 16
Slide 17: Economic Backdrop
Economic Backdrop 10 Growth in Sectoral Credit CP Issuances (Rs lakh cr) 16.0 8.3 8 14.0 13.6 7.4 5.8 12.0 6 10.5 10.0 4 8.0 6.0 5.6 2 3.9 0.5 2.4 4.0 0.1 0 2.0 ‐2 0.0 ‐1.5 ‐1.5 Agriculture Industry Services Retail H1 FY18 H1 FY19 H1‐FY18 H1‐FY19 Oustanding CPs Issuances 17
Slide 18: Economic Backdrop
Economic Backdrop 400,000 Corporate Debt Raised (Rs cr) 327,847 323,951 300,000 228,460 200,000 201,341 100,000 27,119 3,896 ‐ Public Issue Private Placement Total H1 FY18 H1 FY19 18
Slide 19: Economic Backdrop
Economic Backdrop Repo Rate (%) & MCLR(%) 8.5 G Sec Yield (%) 11.50 8 7.97 9.50 7.5 7.98 8.10 7.50 7 6.84 6.50 6.25 6.5 5.50 Apr‐17 Apr‐18 Feb‐18 Oct‐17 Jun‐17 Aug‐17 Dec‐17 Jun‐18 Aug‐18 6 Apr‐17 Apr‐18 Feb‐18 Oct‐17 Oct‐18 Jun‐17 Aug‐17 Dec‐17 Jun‐18 Aug‐18 Repo Rate (%) MCLR (%) 19
Slide 20: Economy Overview
Economy Overview Positives Negatives • Industrial output up • Pick up in inflation • Core sector growth up • Rising interest rates • Favourable monsoon • Exchange rate depreciated • Expected improvement in – Forex decline – FPI outflows GDP growth • Increasing bank credit off • Fall in debt issuance
Slide 21: Economic Outlook for FY19
Economic Outlook for FY19 • GDP growth is expected to be around ~7.5% in FY19 • Inflation expected to be around 5% in FY19 • Rupee to be in the range of Rs.73‐74/$ • RBI is expected to increase repo rate by another at least 25 bps in FY19 due to likely inflationary pressures 21
Slide 22: Thank You
Thank You gSTIVG eotir. ARE Rati TQS \ atings |} ° : Professional Risk oP gy eas 2 Faaryric™