fy16 financial results - care’s ratings ratings... · forward-looking statements are not...

FY16 Financial Results

D. R. Dogra

MD & CEO

FY16 Results 27th May 2016

SAFE HARBOR STATEMENT

2

THIS PRESENTATION AND THE ACCOMPANYING SLIDES (THE “PRESENTATION”), WHICH HAVE BEEN PREPARED BY CREDIT ANALYSIS &

RESEARCH LIMITED (THE “COMPANY”), HAVE BEEN PREPARED SOLELY FOR INFORMATION PURPOSES AND DO NOT CONSTITUTE ANY

OFFER, RECOMMENDATION OR INVITATION TO PURCHASE OR SUBSCRIBE FOR ANY SECURITIES, AND SHALL NOT FORM THE BASIS OR

BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR BINDING COMMITMENT WHATSOEVER. NO OFFERING OF SECURITIES OF

THE COMPANY WILL BE MADE EXCEPT BY MEANS OF A STATUTORY OFFERING DOCUMENT CONTAINING DETAILED INFORMATION

ABOUT THE COMPANY.

THIS PRESENTATION HAS BEEN PREPARED BY THE COMPANY BASED ON INFORMATION AND DATA WHICH THE COMPANY CONSIDERS

RELIABLE, BUT THE COMPANY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WHATSOEVER, AND NO RELIANCE

SHALL BE PLACED ON, THE TRUTH, ACCURACY, COMPLETENESS, FAIRNESS AND REASONABLENESS OF THE CONTENTS OF THIS

PRESENTATION. THIS PRESENTATION MAY NOT BE ALL INCLUSIVE AND MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU MAY

CONSIDER MATERIAL. ANY LIABILITY IN RESPECT OF THE CONTENTS OF, OR ANY OMISSION FROM, THIS PRESENTATION IS EXPRESSLY

EXCLUDED.

CERTAIN MATTERS DISCUSSED IN THIS PRESENTATION MAY CONTAIN STATEMENTS REGARDING THE COMPANY’S MARKET

OPPORTUNITY AND BUSINESS PROSPECTS THAT ARE INDIVIDUALLY AND COLLECTIVELY FORWARD-LOOKING STATEMENTS. SUCH

FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO KNOWN AND UNKNOWN

RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT. THESE RISKS AND UNCERTAINTIES INCLUDE, BUT ARE

NOT LIMITED TO, THE PERFORMANCE OF THE INDIAN ECONOMY AND OF THE ECONOMIES OF VARIOUS INTERNATIONAL MARKETS,

THE PERFORMANCE OF THE RATING INDUSTRY IN INDIA AND WORLD-WIDE, COMPETITION, THE COMPANY’S ABILITY TO

SUCCESSFULLY IMPLEMENT ITS STRATEGY, THE COMPANY’S FUTURE LEVELS OF GROWTH AND EXPANSION, TECHNOLOGICAL

IMPLEMENTATION, CHANGES AND ADVANCEMENTS, CHANGES IN REVENUE, INCOME OR CASH FLOWS, THE COMPANY’S MARKET

PREFERENCES AND ITS EXPOSURE TO MARKET RISKS, AS WELL AS OTHER RISKS. THE COMPANY’S ACTUAL RESULTS, LEVELS OF

ACTIVITY, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY AND ADVERSELY FROM RESULTS EXPRESSED IN OR IMPLIED

BY THIS PRESENTATION. THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY FORWARD-LOOKING INFORMATION CONTAINED

IN THIS PRESENTATION. ANY FORWARD-LOOKING STATEMENTS AND PROJECTIONS MADE BY THIRD PARTIES INCLUDED IN THIS

PRESENTATION ARE NOT ADOPTED BY THE COMPANY AND THE COMPANY IS NOT RESPONSIBLE FOR SUCH THIRD PARTY STATEMENTS

AND PROJECTIONS.


Contents

Highlights

Financial & Business Performance

MCR / CDQI

New Developments

Economic Backdrop

3


Highlights for FY16

• Growth in Financial Indicators

– Growth in income from Operation 7.2% over FY 15

– Total income lower by 5.3% over FY15

– Increase in Expenses of 2.1%

– Operating Profit margins increased to 60.7%

– PAT margins at 41.5% in FY16

– 3,105 new clients added during FY16

– Final dividend of Rs. 10 per share proposed – Payout ratio of 83.70%

• Business Profile

– Total volume of debt rated stood at Rs. 10.85 lakh crore in FY16 as against

Rs. 10.97 lakh crore in FY15

– Total number of instruments rated were 7,527

4


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

5


Financial Performance – Consolidated Accounts

Rs crore FY15 FY16 Growth

Total income from Ops 260.55 279.37 7.22%

Other income 43.69 8.69 -80.11%

Total income 304.24 288.06 -5.32%

Total Expenses 107.38 109.66 2.13%

Operating profit 153.17 169.70 10.79%

PAT 137.82 119.60 -13.22%

Operating profit margin 58.79% 60.74%

PAT Margin 45.30% 41.52%

6


Financial Performance: FY16 (Rs cr)

304.24

288.06

270

280

290

300

310

FY15 FY16

Total Revenue

107.38

109.66

106

108

110

FY15 FY16

Total Expenditure

154.47

169.70

140

150

160

170

180

FY15 FY16

Operating Profit137.82

119.60

110

120

130

140

FY15 FY16

Profit After Tax

7


Financial Performance: FY16

FY16 Operating profit margin stood at

60.75% mainly due to growth in

revenues and expense control

FY16 PAT margin stood at 41.52% as

against 45.30% in FY15 mainly due to

lower investment income on investments

made for a longer tenure where income

can be booked only on realization.

58.79

60.75

57

58

59

60

61

62

FY15 FY16

Operating Profit Margin (%)

45.30

41.52

40 41 42 43 44 45 46 47

FY15 FY16

PAT Margin (%)

8


Business Performance

9,828

10,332

10,950

11,838

12,373

9,000

9,500

10,000

10,500

11,000

11,500

12,000

12,500

Mar'15 June'15 Sept'15 Dec'15 Mar'16

Total Active Clients

9


Business Performance: FY16

0.64

3.79

6.45

10.97

1.10

4.23

5.45

10.85

0

2

4

6

8

10

12

14

Short & Medium

term Instruments

Long term

Instruments

Bank Loan Ratings Total

Volume of Debt Rated (Rs lk cr)

FY15 FY16

10


Business Performance: FY16

81 317

5,054

2,521

7,973

67 325

6,038

1,097

7,527

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Short &

Medium term

Instruments

Long term

Instruments

Bank Loan

Ratings

Others Total

No of Instruments Rated

FY15 FY16

11


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

12


Rating Movement

Credit Quality of domestic rated firms/entities declined in FY16 as indicated by the MCR. The

Modified Credit Ratio (MCR) declined from 1.16 in FY15 to 1.12 in FY16

0.99

0.81

1.03

1.161.12

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

13


CARE Ratings Debt Quality Index

The CDQI has been witnessing a downward movement since June’15.The index exhibited some stability

with a moderation of merely 0.01 point during Sept’15 at 92.76, followed by a significant decline to 92.13

in Oct’15 and 91.83 in Nov’15. It continued to register a contraction (albeit marginal) in Dec’15 and stood

at 91.79. The index, after witnessing marginal recovery in the month of January 2016 and February 2016,

declined in March 2016

97.63

95.35

91.0590

95

100

Ma

r'1

2

Ma

y'1

2

July

'12

Se

pt'

12

No

v'1

2

Jan

'13

Ma

r'1

3

Ma

y'1

3

July

'13

Se

pt'

13

No

v'1

3

Jan

'14

Ma

r'1

4

Ma

y'1

4

July

'14

Se

pt'

14

No

v'1

4

Jan

'15

Ma

r'1

5

Ma

y'1

5

Jul'1

5

Se

pt'

15

No

v'1

5

Jan

'16

Ma

r'1

6

CDQI Index

14


Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

15


New Developments

• Was the knowledge partner for the 4th International

Conference on Securitization “Indian Securitization Summit

2015” held at Mumbai

• Received the ‘Fastest Growing Indian Company Excellence

Award’ at International Achievers Conference, Bangkok.

• Launched the CARE Debt Quality Index (CDQI), first of its type

index which helps in quantifying the quality of debt in the

country

• Signed a Memorandum of Understanding (MoU) with Japan

Credit Rating Agency, Ltd. (JCR) to collaborate with each other

as strategic business partners.

16


New Developments

• Entered into an agreement with GREX Alternative Investments

Market to provide a broad analytical framework within which

CARE Ratings will be involved in conducting Rating/Grading

exercises for companies

• CARE Ratings Africa announce its first rating Assigned to Fixed

deposit programme of Banyan Tree Bank Ltd

• Was awarded the title of 4ps Most Recognizable Brands of

Indian origin @ Franchise India’s Omaxe Power brands Glam

2016 held in New Delhi

• Launched CARE Rating Tracker (CART), a platform which gives

information pertaining to 40,000 rated companies across

more than 120 industries

17


New Developments

• Hosted Budget Conversations: FY17’ - a discussion on the

budgetary proposals in Mumbai and Delhi.

– Speakers for the Mumbai event included Mr. Ashvin Parekh

(Managing Partner, Ashvin Parekh Advisory Services LLP),

Mr. Milind Sarwate (Founder & CEO, Increate Value

Advisors LLP) and Mr. Nilesh Shah (Managing Director,

Kotak Asset Management Co. Ltd)

– Speakers for Delhi event included Mr Sanjeev Kaushik

(DMD, IIFCL) and Ms Mythili Bhusnurmath (Consulting

Editor, Economic Times)

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Contents

Highlights


MCR / CDQI

New Developments

Economic Backdrop

19


Economic Backdrop

7.6 7.77.3

7.6

0.0

2.0

4.0

6.0

8.0

10.0

Q1 FY16 Q2 FY16 Q3 FY16 FY16

GDP growth seen at 7.8% in FY17

2.8

2.4

0.0

1.0

2.0

3.0

4.0

FY15 FY16

Subdued Industrial Growth

FY15 FY16

20


Economic Backdrop

60.59

62.00

62.25

63.50

64.91

65.93

67.5

60

62

64

66

68

Q2

FY15

Q3

FY15

Q4

FY15

Q1

FY16

Q2

FY16

Q3

FY16

Q4

FY16

Depreciating Currency

Rs/$

4.9

4.8

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Ap

r-1

5

Ma

y-1

5

Jun

-15

Jul-

15

Au

g-1

5

Se

p-1

5

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Fe

b-1

6

Ma

r-1

6

Easing Inflation

WPI (%) CPI (%)

21


Economic Backdrop

8.65.6 5.7

15.5

9.0

2.7

9.1

19.4

0

5

10

15

20

25

Bank Credit Industry Services Retail

Growth in Credit (%)

FY15 FY16

1,510,060

1,562,170

1,480,000

1,520,000

1,560,000

1,600,000

FY15 FY16

CP Issuances (Rs cr)

FY15 FY16

9,713

465,643 475,356

33,812

466,144 499,956

-

200,000

400,000

600,000

Public Issue Private Placement Total

Corporate Debt Raised (Rs cr)

FY15 FY16

Source: RBI

Source: Prime Database

22


Economic Backdrop

6.00

8.00

10.00

12.00

Ap

r-1

5

Ma

y-1

5

Jun

-15

Jul-

15

Au

g-1

5

Se

p-1

5

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Fe

b-1

6

Ma

r-1

6

Repo Rate & Base Rate (%)

Repo Rate (%) Base Rate (%)

7.5

7.6

7.7

7.8

7.9

8

Ap

r-1

5

Ma

y-1

5

Jun

-15

Jul-

15

Au

g-1

5

Se

p-1

5

Oct

-15

No

v-1

5

De

c-1

5

Jan

-16

Fe

b-1

6

Ma

r-1

6

G Sec Yield (%)

G Sec Yield (%)

23


Economic Outlook for FY17

• GDP growth to improve gradually to 7.8% in FY17

• Inflation expected in the range of 5-5.5%

• Rupee to be in the range of Rs.68-69

• Marginal increase in capital formation

• RBI to maintain accommodative monetary policy stance

– easing of interest rate by 25 bps seen this fiscal

24


Thank You

25

fy16 financial results - care’s ratings ratings... · forward-looking statements are not...

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