Play on quality with consistency
CRISIL is a global analytical company and India’s foremost provider of ratings, data and research, analytics and solutions, with a strong track record of growth and innovation. It was incorporated in 1987 as India’s first credit rating agency. Presently, it is majorly owned by Standard and Poor’s (S&P), the world’s leading provider of independent credit risk research and benchmarks, and a part of McGraw Hill Financial (formerly The McGraw-Hill Companies). S&P currently owns 67.1% stake in the company.
Valuation:
CRISIL remains the preferred bet for its consistent track record in terms of revenue & profitability coupled with strong balance sheet & leadership position. Hence, we expect CRISIL to trade at a premium valuation to its peers. Currently, the stock is available at 31.6x CY18E EPS, which is at the lower end of its historical range of 22.1–51.2x one-year forward EPS. Hence, we recommend BUY rating on the stock with a target price of Rs2,375 valuing it at its three-year mean of 38.0x CY18E EPS.
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