ICRA T3FY22 result
According to the brokerage, “The company’s consolidated operating profit increased by 11.9% year-on-year to 86.6 cros rupees in Q3FY22, mainly due to new business traction. During This quarter, bond issuance grew compared to the corresponding quarter of the previous year, supported by issuances from banks and NBFCs.Bank credit to large industry, however, remained tepid as the recovery in economic activity was dampened by supply-side disruptions Employee spending fell due to attrition while other operating expenses increased (due to rising bad debts and provisions) resulting in an increase in EBITDA of 43% YoY to Rs 34.6cr EBITDA margins increased by 865 basis points to 40% PAT increased by 27.8% YoY annual at Rs 30.9cr and the PAT’s margin increased by 440 basis points to 35.7%.
HDFC Securities said: “The ratings, research and other services segment, including foreign subsidiaries, increased by 3.7% on an annual basis. The outsourcing and information services segment increased by 30.8% due to increased business from existing and new clients, while consulting services decreased by 5% due to challenges in the external environment and refocusing on certain unprofitable segments of its business . »
Buy for a target price of Rs 4195
The brokerage claimed that “the growing preference of sound borrowers for bank lending alternatives has opened up an additional source of revenue. ICRA’s outsourcing and information services segment is doing well and margins are improving. The long-term outlook for rating activity remains positive, given the significant funding needs that are expected to be raised through a combination of bank loans and bonds CIFAR aims to gain portfolio share with targeted large and medium-sized clients by being the preferred rating agency from the point of view of investors.
“ICRA is well positioned to benefit from the recovery in credit growth. We expect ICRA’s revenue/EBITDA/PAT to grow at a CAGR of 13/21/21% over the course of the year. FY21-24, with credit growth demand picking up and outsourcing activities surging ICRA has healthy cash and cash equivalents (FY24) on books equivalent to 19.5 % of its CMP We think investors can buy the stock in the Rs 3720-3750 band and add dips to Rs 3350-3380 (22.5x FY24E EPS) for a fair value of Rs 4195 (28x FY24E EPS ) over the next 2 quarters,” says HDFC Securities.
The security was selected in the brokerage report of HDFC Securities. Investing in stocks presents a risk of financial loss. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions based on the article.