Care Ratings Ltd · NSE:CARERATING
Care Ratings — H1 FY2020 Earnings Presentation
25 slides from Care Ratings's earnings presentation, Nov 4, 2019
Slide 1: Cover letter to stock exchanges on board meeting outcome
~~Ratings Professional Risk Opinion Date: November 04,2019 SE/2019-20/0S3 To, The General Manager The National Stock Exchange India Ltd. The Corporate Relation Department Listing Department Bombay Stock Exchange Limited Exchange Plaza Phiroza Jeejeebhoy Towers Bandra Kurla Complex 14TH Floor, Dalal
Slide 2: Q2 and H1 2019-20 Results
Registered office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai 400 022 CIN: L67190MH1993PLC071691 th Mumbai, 4 November, 2019 Q2 and H1 2019-20 Results The Board of Directors of CARE Ratings approved the financial results for the quarter ended
Slide 3: Economic backdrop
Economic backdrop The first quarter of the fiscal year 2019-20 was typified by a slowdown in the economic activities at the global as well as domestic front. This was also witnessed in the second quarter of the fiscal year owing to weak consumer demand (indicated inter-alia by slowdown in the automo
Slide 4: CARE Ratings Limited – H1FY20
CARE Ratings Limited Investor Presentation – H1FY20
Slide 5: Safe Harbor Statement
SAFE HARBOR STATEMENT THIS PRESENTATION AND THE ACCOMPANYING SLIDES (THE “PRESENTATION”), WHICH HAVE BEEN PREPARED BY CREDIT ANALYSIS & RESEARCH LIMITED (THE “COMPANY”), HAVE BEEN PREPARED SOLELY FOR INFORMATION PURPOSES AND DO NOT CONSTITUTE ANY OFFER, RECOMMENDATION OR INVITATION TO PURCHASE OR SU
Slide 6: CARE Ratings Group
CARE Ratings Group CARE Ratings Limited CARE Risk CARE Advisory CARE Ratings CARE Ratings Solutions Research and (Africa) (Nepal) Private Training Limited, Private Limited, 51% Limited, 100% 100% Limited, 78% Investors Presentation H1FY20 3
Slide 7: Diversified Business Mix
Diversified Business Mix Ratings Information Analysis & Grading Manufacturing & Services sector Industry & Customized Research reports Financial sector CARE Industry Risk Metrics (CIRM) reports Infrastructure Grading services Small & Medium Enterprises Training Structured Finance
Slide 8: Experienced & Professional Management
Experienced & Professional Management T N Arun Kumar– Interim CEO 30 years of experience in financial services Before joining CARE, worked for The Industrial Finance Corpn. of India Ltd. Holds Bachelor’s degree in Technology (Agricultural Engineering) from IIT – Kharagpur PGDM from IIM - Ahm
Slide 9: Experienced & Professional Management
Experienced & Professional Management Milind Gadkari Swati Agarwal Revati Kasture Sanjay Kumar Amod Khanorkar Madan Sabnavis Senior Director, Jain Senior Director, Agarwal Senior Director, Chief Economist Ratings Senior Director, Ratings Senior Director, Ratings Business 29 years of Ratings Develo
Slide 10: Shareholding Snapshot as on September 30, 2019
Shareholding Snapshot as on September 30, 2019 Names of Top 20 Shareholders Holding % LIFE INSURANCE CORPORATION OF INDIA+ LIC P & GS FUND 9.85 CRISIL LIMITED 8.90 FRANKLIN TEMPLETON INVESTMENT FUNDS + Mutual fund 8.13 STICHTING DEPOSITARY APG EMERGING MARKETS EQUITY P 6.84 L&T MUTUAL FUND TRUSTEE L
Slide 11: Financial Performance
Financial Performance Rs. in Crores Standalone Consolidated % Change % Change Particulars H1FY20 H1FY19 H1FY20 H1FY19 Revenue from Operations 111.65 151.02 -26.1% 121.55 156.65 -22.4% Total Expenses 67.48 61.61 9.5% 77.18 68.83 12.1% Operating Profit 44.16 89.41 -50.6% 44.37 87.81 -49.5% Other Incom
Slide 12: Financial Performance: H1FY20 (Rs cr) - Standalone
Financial Performance:H1FY20 (Rs cr)- Standalone Total Operating Revenue 200 Operating Profit 151.01 89.41 150 100 111.65 100 44.17 50 50 - - H1 FY19 H1 FY20 H1 FY19 H1 FY20 Total Expenditure PAT 80 61.61 67.48 100 71.94 60 75 50.08 40 50 20 25 - - H1 FY19 H1 FY20 H1 FY19 H1 FY20 Investors Presentat
Slide 13: Financial Performance: H1FY20 - Standalone
Financial Performance: H1FY20 - Standalone Operating Profit Margin (%) H1FY20 Operating profit margin fell due 80% to lower operating income caused by 59.2% 60% 39.6% lower borrowing by the NBFC sector 40% since the end of the second quarter of 20% 0% FY19 & muted Capex of the corporate H1 FY19 H1 F
Slide 14: Business Performance (New clients): H1FY20
Business Performance (New clients): H1FY20 9.00 Volume of Debt Rated (Rs lk cr) 8.13 4,500 No of Instruments Rated 4,276 8.00 4,000 3,714 7.00 3,500 6.00 5.67 3,000 2,635 5.00 2,500 2,039 4.00 3.54 2,000 2.75 3.00 2.31 2.11 1,500 1.84 2.00 1.25 1,000 1.00 500 340 437 63 38 159 121 0.00 - Short & Med
Slide 15: Rating Movement
Rating Movement The credit quality of entities rated by CARE Ratings declined in the first half of the current financial year reiterating the slowdown in the domestic economy. The credit quality as measured by CARE Rating’s ‘Modified Credit Ratio’ (MCR) in H1FY20 was at a 6 year low when compared wi
Slide 16: CARE Ratings Debt Quality Index (CDQI)
CARE Ratings Debt Quality Index (CDQI) The index fell sharply in June 2019 mainly due to moderation in the liquidity scenario for NBFCs and HFCs resulting in sharp rating migrations. The index further declined marginally by 0.16 in July’19 and remained more or less stable in August’19. Thereafter, i
Slide 17: Economic Backdrop
Economic Backdrop GDP growth (%) 6.0 IIP 5.3 9.0 8.1 8.0 5.0 8.0 7.7 6.8 7.0 7.0 6.6 4.0 5.8 6.0 5.0 5.0 % % 3.0 4.0 2.4 3.0 2.0 2.0 1.0 1.0 0.0 Q2FY18 Q3FY18 Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20 0.0 FY19 (Apr-Aug) FY20 (Apr-Aug) Investors Presentation H1FY20 14
Slide 18: Economic Backdrop
Economic Backdrop 4.5 Inflation Rs/$ 4.0 May-19 4.0 Aug-19 Sep-19 Apr-19 Jun-19 Jul-19 3.5 3.8 3.2 3.2 3.3 3.0 3.1 67.5 2.9 3.0 2.57 3.1 3.2 68 2.5 2.2 2.8 2.9 2.8 % 2.0 68.5 2.0 2.0 69 68.81 1.5 69.5 1.0 69.43 69.44 1.2 1.1 70 69.77 0.5 0.3 70.5 0.0 71 Jun-19 Feb-19 Sep-19 Aug-19 Mar-19 Apr-19 Jan-
Slide 19: Economic Backdrop
Economic Backdrop Growth in Bank credit 4.5 4.1 4.0 3.5 3.0 2.5 % 2.0 1.5 1.0 0.5 0.0 0.0 H1 FY19 H1 FY20 Investors Presentation H1FY20
Slide 20: Economic Backdrop
Economic Backdrop Growth in Credit CP Issuances (Rs lakh cr) 8.0 7.4 16.0 5.86.1 13.60 6.0 14.0 11.90 4.0 12.0 2.4 Rs. Lkah crore 10.0 2.0 % 0.1 8.0 0.0 1.5 5.60 6.0 4.59 -2.0 4.0 -2.2 -4.0 2.0 -3.8 -6.0 0.0 Agriculture Industry Services Retail Oustanding CPs Issuances H1 FY19 H1 FY20 H1 FY19 H1 FY2
Slide 21: Economic Backdrop
Economic Backdrop Corporate Debt Raised 300,000 250,000 262,392 254,187 200,000 204,721 Rs. Cr. 177,502 150,000 100,000 27,219 8,205 50,000 - Public Issue Private Placement Total H1 FY19 H1 FY20 Investors Presentation H1FY20 18
Slide 22: Economic Backdrop
Economic Backdrop 12.00 Repo Rate (%) & MCLR(%) 8.50 G Sec Yield (%) 11.00 8.00 10.00 9.00 8.05 7.50 % 8.00 7.43 % 7.00 7.00 6.00 6.67 5.00 6.50 5.15 4.00 Jun-19 Feb-19 Sep-19 Oct-19 Apr-19 Aug-19 Jan-19 Mar-19 May-19 Jul-19 6.00 Apr-18 May-18 Jul-18 Aug-18 Sep-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
Slide 23: Flow of funds to the commercial sector
Flow of funds to the commercial sector Rs. lakh crore FY19 (Apr-mid-Sept) FY20 (Apr-mid-Sept) A. Flow from banks, i.e., Adjusted non-food credit (A1+A2) 1.9 -1.3 A1. Non-food credit 1.7 -0.9 A2. Non-SLR investment by scheduled commercial banks 0.2 -0.4 B. Flow from non-banks (B1+B2) 5.5 2.2 B1. Dome
Slide 24: Economic Outlook for FY20
Economic Outlook for FY20 • GDP growth is expected to be 6.2% in FY20 • Inflation expected to be around 3.5-4% for the remainder of FY20 • RBI unlikely to go in for a further rate cut in the next monetary policy given that the CPI inflation came in close to the RBI’s median target of 4%. • For the r
Slide 25: Thank You
Thank You Investors Presentation H1FY20 22