Domestic brokerage and research firm Anand Rathi believes that CRISIL will maintain its business growth momentum, driven by its investments in talent and technology, recovery in economic activities, new product offerings and solutions.
The brokerage house has initiate its coverage on Crisil shares with a Buy rating and has a twelve-month target price of ₹4,000 per share. Shares of Crisil have surged more than 90% in the last year whereas is up about 24% in the last one month.
“CRISIL’s revenue is well diversified both business segment wise as well as geography wise. Revenue from overall research segment grew by 20.3% in FY21, due to pick up in economic activity with increased traction for data, insights and capital market research offerings. Crisil's profits are mainly contributed from research and ratings segment," brokerage's note highlighted.
CRISIL’s revenue grew by around 10% CAGR in the last 3 years. With recovery in economic activity, client additions, new product offerings and solutions. Anand Rathi estimates that the momentum will continue and the revenue will grow at 12% compound annual growth rate (CAGR) over the next two years. The brokerage also estimates the company will maintain stable operating margins.
Evolving supply chain dynamics, expected capex cycle revival, accelerated digital transformation to act as positive triggers for the company, as per Anand Rathi, whereas, evolving regulatory environment, Intense competition, inflation and reputation risk could act as key risks, it added.
As per the recent shareholding patter on the BSE, ace investor Rakesh Jhunjhunwala holds 2.92% stake in Crisil whereas his wife Rekha Jhunjhunwala has 2.57% equity in the company as of December 2021.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
