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    Crisil Limited

    CRISIL
    Financial Services·6 May 2025
    Management Summary

    CRISIL reported a strong Q1 FY25 with overall revenue up 10.2% and PBT/PAT growing by 16% YoY, primarily driven by exceptional performance in the Rating Services segment (up 32.5%). While global macroeconomic uncertainties continue to impact discretionary spending, particularly in the Research, Analytics and Solutions segment, Crisil is strategically focusing on high-growth areas like Gen AI and private capital. The company declared an interim dividend of INR 8 per share, reflecting confidence in its performance.

    Highlights

    5

    • Crisil demonstrated resilience amidst macroeconomic uncertainty in 2024 and Q1 2025, driving meaningful impact for clients.

    • Overall revenue grew by 10.2% in Q1 FY25 over the corresponding quarter of the previous year.

    • Profit Before Tax (PBT) and Profit After Tax (PAT) both grew by approximately 16% on a year-on-year basis quarterly in Q1 FY25.

    • The Rating Services segment grew significantly by about 32.5% YoY in Q1 2025, driven by strong growth from new engagements and robust surveillance work delegation from S&P Global Rating Services.

    • Crisil Intelligence witnessed momentum in industry research, consulting, credit, and risk offerings, integrating Gen-AI capabilities into its Credit+ ICON solution.

    Concerns

    5

    • The global economy faces challenges with ongoing tariff actions and their potential impact on growth prospects, trade, and inflation.

    • S&P Global lowered GDP growth forecasts for most countries and raised inflation forecasts for the U.S., anticipating a material slowdown in growth across various economies.

    • Elevated uncertainty may lead to tighter client budgets and delays in discretionary spending by global clients.

    • Crisil Integral IQ's performance was muted in 2024 due to curtailed discretionary spending by global customers and the conclusion of a few long-term projects.

    • The Research, Analytics and Solutions segment's revenues were marginally lower in 2024 than the previous year due to the impact on discretionary spending and project conclusions.

    What Changed1

    vs Q4 FY26

    Guidance items9 → 4 (-5)

    Segment breakdown

    FY24 Revenue GrowthQ1 2025 Revenue Growth
    Overall Company3.8%—
    Rating Services—32.5%
    Research, Analytics and Solutions-0.1%2%
    Heatmap· 2 shared metrics

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Dividend

    ₹8/share (interim)

    Guidance & targets

    3
    CategoryTargetPriority
    Financial Sector
    Bank Credit Growth
    12%-13%
    		Medium
    Monetary Policy
    Repo Rate Cuts
    at least two more 25 bps cuts
    		Medium
    Bond Market
    Bond Issuances
    increased
    		Medium

    What to watch in Q1 FY26

    5

    Macroeconomic and Geopolitical Stability

    next quarter / coming quarters
    CurrentOngoing uncertainty, tariff actions, potential slowdown
    TargetIncreased clarity and stability in global environment

    Why it matters

    Management links private capex revival and discretionary spending by global clients to this, directly impacting Crisil's business outlook.

    Given the geopolitical uncertainty🌐 that is there in the market, it may be one reason why private sector capex is not really picking up the way it can. Operating debt is already high. So if you ask me, the condition is favorable, but I think geopolitical situation is something where people are expecting more clarity, more stability before you see a good uptake in private capex.

    Risks & concerns

    5
    RiskSeverity

    Macroeconomic and Geopolitical Risks

    Global developments, ongoing tariff actions, and their impact on growth prospects, trade, and inflation are actively monitored, though no material direct impact has been seen yet. — Management acknowledged

    medium

    Foreign Currency Risk

    Significant revenue in foreign currencies creates exchange rate fluctuation risk, but Crisil has a well-structured hedging policy to act as a buffer. — Management acknowledged

    low

    People Risk / Attrition

    As a talent company, Crisil has a proactive approach to people management; attrition rate has been stable and in line with industry trends. — Management acknowledged

    low

    Tighter Client Budgets and Delays in Discretionary Spending

    Elevated uncertainty may lead to tighter client budgets and delays in discretionary spending by global clients, impacting growth in segments like Integral IQ. — Management acknowledged

    medium

    Impact of SEBI Regulations on Credit Rating Agencies

    SEBI's potential guidelines on monitoring capital usage and analyzing company track records are currently in the feedback stage; Crisil will evaluate impact if final guidelines change. — Analyst not addressed

    low

    Q&A highlights

    7

    “I think the growth has been seen within GAC, we have seen across the portfolio, right, on surveillance delegations, the support that we do on digital transformation, and the entire work that we do for S&P Global Ratings. So it is, I think, supporting them in their growth journey, also supporting on the technology transformation journey that they embark on. When we come to the non-S&P Global Ratings business that we have, I think the focus there is to play to our strengths, which is largely on the analytical side, research side, areas that we have been able to support them, program management, technology, of course, technology transformation, and data analytics.”

    Clarifies the specific areas driving growth within the GAC segment and Crisil's strategic focus for its non-S&P Global businesses.

    asked by Rajiv Mehta

    3 min read7 chapters

    Detailed Narrative

    01

    Q1 FY25 Financial Performance Overview

    Crisil reported a resilient performance in Q1 FY25, with overall revenue growing by 10.2% year-on-year over the previous year's corresponding quarter. Profit Before Tax (PBT) and Profit After Tax (PAT) both saw approximately 16% year-on-year growth for the quarter. This follows a modest 3.8% revenue growth in FY24, where PBT grew by almost 7% (or 10.5% excluding a one-off📎 gain from Argentinian Peso devaluation in Q4 FY23) and PAT grew by 3.9%.

    02

    Rating Services Segment Outperformance

    The Rating Services segment, encompassing Crisil Ratings and the Global Analytical Center (GAC), demonstrated strong growth of approximately 32.5% year-on-year in Q1 2025. This was driven by continued investor preference for best-in-class ratings, an uptick in the bond market in the latter half of 2024, and significant growth in surveillance work delegation from S&P Global Ratings. The GAC also saw strong growth from new engagements and support for S&P Global in new areas.

    03

    Research, Analytics and Solutions Segment Performance and Strategy

    The Research, Analytics and Solutions segment experienced muted performance in 2024, with revenues marginally lower than the previous year, primarily due to curtailed discretionary spending by global clients and the conclusion of some long-term projects. However, the segment's margin improved by 2.4% in FY24, and Q1 2025 saw a 2% revenue growth and a strong 16% profit uptick. Crisil is focusing on growth areas like private capital, GenAI, data analytics, and mid-sized banks, while also leveraging offshoring and automation trends.

    04

    Macroeconomic and Business Environment Trends

    The global economy faces challenges from ongoing tariff actions, potentially impacting growth, trade, and inflation, with S&P Global forecasting a material slowdown. This uncertainty is leading to tighter client budgets and delays in discretionary spending. Domestically, India's GDP is projected to grow at 6.5% in Fiscal 2026, and bank credit at 12-13%. Crisil anticipates further repo rate cuts of 25 bps each in Fiscal 2026, which could boost bond issuances.

    05

    Private Sector Capex and Investment Outlook

    Despite healthy corporate balance sheets, strong debt protection metrics, and 70-75% capacity utilization, private sector capex remains subdued. Management attributes this to geopolitical uncertainty🌐, tariff conversations, and the need for clarity and stability before significant investment. While areas like renewables, EV-related sectors, and infrastructure are seeing investments, overall capex is being delayed by a couple of quarters.

    06

    Gen AI Adoption and Crisil's Approach

    Crisil is actively exploring Gen AI to enhance client offerings and internal productivity. While widespread adoption in finance is still early, Crisil has integrated Gen AI into products like Credit+ ICON (for credit report drafts) and Fulkrum (natural language query). Management views Gen AI as an opportunity to leverage its domain expertise, improving efficiency and effectiveness without completely replacing existing work.

    07

    Brand Identity and Organizational Structure

    In January 2025, Crisil rolled out a new brand identity, positioning its businesses (Crisil Ratings, Crisil Intelligence, Crisil Coalition Greenwich, Crisil Integral IQ) under a cohesive umbrella. This repositioning aims to demonstrate a unified enterprise and enhance client experience, rather than creating separate P&Ls for each brand, as businesses are already classified and monitored within existing segments.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.