Slide 1: CRISIL's 2017 Results
CRISIL’s 2017 Results Analyst Meet – February 14, 2018 © 2018 CRISIL Ltd. All rights reserved. 1
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 Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Key risks and challenges Summary 3
Slide 4: Over 30 years of innovation and excellence
Over 30 years of innovation and excellence S&P acquires majority stake in S&P acquires CRISIL Risk Ratings 9.68% in CRISIL Sold Solutions Sold stake in India Index Global Research & Economatters Services and Products Research Infrastructure Analytics SME Ratings Advisory © 2018 CRISIL Ltd. All right
Slide 5: Strong global footprint and delivery capability
Strong global footprint and delivery capability © 2018 CRISIL Ltd. All rights reserved. HONG KONG 5
Slide 6: Anchored in a position of strength
Anchored in a position of strength Rating on 25,000+ large and mid-scale India’s leading rating agency corporates and financial institutions; 110,000+ SME ratings assigned to date India’s leading independent research 90% of India’s banking industry by asset base are house our clients © 2018 CRISIL L
Slide 7: Evolving macro-economic environment
Evolving macro-economic environment India Emphasis on © 2018 CRISIL Ltd. All rights reserved. Growth revival post Focus on infra and NPAs and fiscal agriculture and structural reforms MSMEs slippage a concern rural income Global Synchronized global Growing trade Expected interest Geopolitical risks
Slide 8: Rapidly changing business landscape
Rapidly changing business landscape Ecosystem Evolving © 2018 CRISIL Ltd. All rights reserved. AI & machine Payments and Alternative data enabling platforms decisioning Currency Millennial Focus on workforce & end Policy & evolving Increasing cost sustainability users regulation optimization 8
Slide 9: Our vision and go-forward strategy
Our vision and go-forward strategy Vision: To be a leading agile and innovative, global analytics company © 2018 CRISIL Ltd. All rights reserved. Launch new Deepen Enhance core products and Drive Customer offerings advanced Excellence centricity analytics Talent Technology 9
Slide 10: Enhancing our core and adding new analytics and solutions
Enhancing our core and adding new analytics and solutions SPARC Counterparty credit assessment through a common platform Innovative financial research platform for global investment banks © 2018 CRISIL Ltd. All rights reserved. Agile Digital platform for access to assessments and research Innovative
Slide 11: Deepening customer centricity and franchise - India
Deepening customer centricity and franchise - India CRISIL Infrastructure Advisory Ashu Suyash and SEBI Chairman Ajay Tyagi, CRISIL Ratings hosted its CRISIL Research partnered with © 2018 CRISIL Ltd. All rights reserved. hosted the first ‘CRISIL India along with other dignitaries inaugurated the se
Slide 12: Deepening customer centricity and franchise - Global
Deepening customer centricity and franchise - Global Ashu Suyash, Managing Director & CEO, CRISIL GR&A hosted a seminar CRISIL Infrastructure Advisory CRISIL GR&A sponsored GARP: © 2018 CRISIL Ltd. All rights reserved. CRISIL participated in the fourth Asia Summit on ‘Disruption and Future of partic
Slide 13: Corporate Social Responsibility: Core to CRISIL
Corporate Social Responsibility: Core to CRISIL Moneywise Centres for Financial Mein Pragati CRISIL RE Literacy © 2018 CRISIL Ltd. All rights reserved. Empowering socially and economically Collaborating with the RBI and nationalized Enabling environment conservation, financial disadvantaged sections
Slide 14: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Key risks and challenges Summary 14
Slide 15: 2017 revenues grew by 7%; PAT by 3%
2017 revenues grew by 7%; PAT by 3% Segment operating revenues ₹ crore +7% +3% 1,548 1,658 426 441 76 98 22 28 1,004 1,080 277 287 128 126 468 480 © 2018 CRISIL Ltd. All rights reserved. 4Q 2016 4Q 2017 2016 2017 Ratings Research Advisory Profit after tax^ ₹ crore +3% 294 304 +5% 91 96 4Q 2016 4Q 20
Slide 16: Revenue per employee continues to rise
Revenue per employee continues to rise Revenue per employee* 3,8603,860 3,860 3,938 3,629 3,424 3,454 3,629 3,424 3,454 40 40 42 38 38 40 36 © 2018 CRISIL Ltd. All rights reserved. 36 32 32 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 Revenue per employee (₹ lakh) Average number of employees du
Slide 17: Strong track record of returning cash to shareholders
Strong track record of returning cash to shareholders Return to shareholders ₹ crore 79% 79% 69% 63% 53% © 2018 CRISIL Ltd. All rights reserved. 42 40 41 42 37 +11% 299 232 240 102 157 170 197 2013 2014 2015 2016 2017 Dividends (incl. distribution tax) Buyback Dividend payout Diluted EPS Note: Numbe
Slide 18: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Key risks and challenges Summary 18
Slide 19: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Ratings Research Advisory Key risks and challenges Summary
Slide 20: Corporate bonds contribute a fourth of the outstanding funding to the corporate sector
Corporate bonds contribute a fourth of the outstanding funding to the corporate sector 71.3 81.4 92.0 101.1 111.0 114.1 100% 10.7% 11.1% 12.1% 11.7% 10.4% 10.7% 80% 19.6% 19.3% 21.1% 22.5% 25.3% 26.1% © 2018 CRISIL Ltd. All rights reserved. 60% 40% 69.7% 69.5% 66.8% 65.8% 64.3% 63.2% 20% 0% Mar-13 M
Slide 21: Wholesale credit on its way to recovery
0% 5% -5% 10% 15% 20% 25% Jan-16 Feb-16 Mar-16 Source: RBI, CRISIL Research Apr-16 May-16 Jun-16 Jul-16 Aug-16 Credit Growth Sep-16 Oct-16 Nov-16 21 Dec-16 Jan-17 Wholesale Credit Growth Feb-17 Wholesale credit on its way to recovery Trend in credit growth Mar-17 Apr-17 May-17 Retail Credit Growth J
Slide 22: Underpinned by improving credit ratios
Underpinned by improving credit ratios Semi-annual trends in the credit ratio* and the debt-weighted credit ratio^ Times 3.00 2.73 2.50 2.13 © 2018 CRISIL Ltd. All rights reserved. 1.92 2.00 1.75 1.81 1.64 1.50 1.27 0.76 0.76 1.00 0.87 0.62 1.17 0.50 0.29 0.72 0.27 0.67 0.61 0.59 0.20 0.11 0.00 H2-1
Slide 23: However, stress in the banking industry remains
However, stress in the banking industry remains GNPA to reach 10.5% by Mar 18 Rs. Lakh crore 12 12% 10.1% ~10.5% 9.4% 10% © 2018 CRISIL Ltd. All rights reserved. 8 7.5% 8% 6% 4.3% ~9.5 4 8.0 8.4 4% 6.1 2% 3.2 0 0% Mar-15 Mar-16 Mar-17 Sep-17 Mar-18P GNPA (Rs.Lakh crore) GNPA 23
Slide 24: Recent announcements augur well for the bond and credit markets
Recent announcements augur well for the bond and credit markets • Move from ‘AA’ to ‘A’ grade ratings for investments by insurance companies, pension and provident funds will improve access to capital market for larger number of companies • Push for one-fourth of large corporates financing needs fro
Slide 25: Ratings: 2017 Highlights
Ratings: 2017 Highlights Financial update Revenue (₹ cr) • Growth in revenues driven by debt offerings by large +3% corporate segment offset by muted performance in bank loan 468 480 ratings and SME segments • Segment profitability reflects improved efficiencies © 2018 CRISIL Ltd. All rights reserve
Slide 26: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Ratings Research Advisory Key risks and challenges Summary
Slide 27: Global: Continued demand for differentiated investment research in the global markets
Global: Continued demand for differentiated investment research in the global markets Bottoming out of CIB revenue pools $ Billion 537 545 529 521 519 129 119 110 117 105 64 62 67 58 58 76 85 83 77 80 127 136 133 135 139 © 2018 CRISIL Ltd. All rights reserved. 97 98 91 90 92 45 46 46 45 47 2013 2014
Slide 28: Global: Regulatory landscape stabilizing, major world economies witnessing initial signs of synchronized, sustained growth
Global: Regulatory landscape stabilizing, major world economies witnessing initial signs of synchronized, sustained growth Enterprise Risk: CCAR, Global Regulatory Accounting regulations: Key regulations DFAST, EBA/PRA Stress Prescription: Basel III, IV US GAAP, IFRS Testing © 2018 CRISIL Ltd. All r
Slide 29: India: Key emerging trends and expectations
India: Key emerging trends and expectations Buoyant capital market supporting research needs Increasing demand for dynamic and granular data © 2018 CRISIL Ltd. All rights reserved. Robust growth in AUMs in AMCs over past five years Growing demand from the BFSI sector including credit and fixed incom
Slide 30: Research: 2017 Highlights
Research: 2017 Highlights Financial update Revenue (₹ cr) • Revenue grew with new client additions across India and Global Research +8% • Opportunities tapped in model risk management, change 1,004 1,080 management, FRTB and FCC • Margins reflect impact of forex and investments © 2018 CRISIL Ltd. Al
Slide 31: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Ratings Research Advisory Key risks and challenges Summary
Slide 32: Business environment continues to be 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 NPAs • Ambitious and visionary programs by the Indian government in the infrastructure space • Leverage Big Data analytics fo
Slide 33: Advisory: 2017 Highlights
Advisory: 2017 Highlights Financial update Revenue (₹ cr) • Robust revenue growth with key wins across risk solutions and infrastructure advisory +29% 98 • Segment profitability reflects improving product mix and 76 © 2018 CRISIL Ltd. All rights reserved. monetization of investments Enhance core off
Slide 34: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Key risks and challenges Summary 34
Slide 35: Key risks and challenges
Key risks and challenges • Uncertain regulatory environment • Reputation risk • Disruptive technology © 2018 CRISIL Ltd. All rights reserved. • Adverse currency movement • Intense price competition • Cyber risk 35
Slide 36: Agenda
Agenda Introduction © 2018 CRISIL Ltd. All rights reserved. Financial highlights Segment performance Key risks and challenges Summary 36
Slide 37: In summary
In summary • Policy developments for bond market and credit growth on a positive trajectory • Infrastructure and SME push by the Indian government © 2018 CRISIL Ltd. All rights reserved. • Global economic recovery • Focus on regulatory adherence continues by global financial institutions • CRISIL is
Slide 38: 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 39: Thank you
Thank you 39 © 2018 CRISIL Ltd. All rights reserved.