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CRISIL Company report

CRISIL (Credit Rating Information Services of India Limited) was incorporated in 1987. It is India’s foremost provider of ratings, data, research, analytics, and solutions. They operates their business from India, United States (US), United Kingdom (UK), Argentina, Poland, China, Hong Kong, Singapore and United Arab Emirates (UAE). It is owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics & data to the capital and commodity markets worldwide. It serves clients ranging from MSME to large corporates, investors and top global financial institutions. They also work with governments & policy makers in the infrastructure space in India and other emerging markets. It help clients manage and mitigate risks, take pricing and valuation decisions, reduce time to market, generate more revenue, and enhance returns. By helping shape public policy on infrastructure in emerging markets, CRISIL helps catalyze economic growth and development in these geographies. The company has three business segments1) Research- Research segment includes global research and risk solutions, industry reports, customized research assignments, subscription to data services, independent equity research (IER), IPO gradings and training. 2) Ratings- Ratings services includes credit ratings for corporates, banks, bank loans, small and medium enterprises (SME), credit analysis services, grading services and global analytical services. 3) Advisory- It provides advisory services and a comprehensive range of risk management tools, analytics and solutions to financial institutions, banks and corporates in India.

#SALES #GROWTH 5 Year CAGR 12.4%

In CY23, the sales increased by 13% YoY to ₹3,140 cr, driven by growth in both ratings and research business by 16% and 12%, respectively. The bond issuances declined in H2 CY23, on account of increasing geopolitical uncertainties and the consequent hardening of bond yields. Both the global divisions witnessed growth amidst pressure on discretionary spends by financial services clients. GR&RS (Global Research & Risk Solutions) division saw traction in lending and buyside segment, while GBA (Global Benchmarking Analytics) saw momentum in CIB, driven by emphasis on client engagement. In 9M CY24, the sales increased by 5.6% YoY to ₹2,347 cr, largely driven by momentum in bond issuances and bank loan ratings. However, research division was impacted on account of slowdown in the discretionary spendings.

#EBITDA #GROWTH 5 Year CAGR 13.5%

During CY23, the EBITDA stood at ₹881 cr, a growth of 20.7% YoY. The major expenses mainly comprised of employee benefit expense and other expenses. During 9M CY24, the EBITDA stood at ₹623 cr, recording a growth of 3.9% YoY on account of increase in other expenses.

#PAT #GROWTH 5 Year CAGR 12.6%

During CY23, the PAT stood at ₹658 cr, recording a growth of 17% YoY. The impact of foreign exchange movement was not favorable as compared with the same period last year. During 9M CY24, the PAT stood at ₹459 cr, recording a growth of 2.4% YoY. The effective tax rate of the company inched up on account of increase in tax rates in one of the ex-India jurisdictions.

#Management

Mr. Yann Le Pallec is Executive Managing Director and Global Head of Ratings for S&P Global Ratings. He oversees a group of 2,200 analysts and support staff present in 28 countries and covering more than one million outstanding ratings on entities and securities across a wide range of sectors including governments, corporations, financial institutions and structured finance. Amish Mehta is the MD and CEO of CRISIL. He leads CRISIL’s Indian and global businesses, steering its efforts to deliver high-quality analytics, opinions & solutions to corporations, investors, financial institutions, governments. policymakers and The management believes that the two pillars of business growth & traction would be talent and technology. They would continue to invest in the same over medium to long term which would drive the revenue.

#Future #Plans

• In CY23, wholesale bank credit is expected to maintain its growth trajectory in comparison to the past two years, supported by continuing economic recovery and higher working capital funding requirements in an inflationary environment. • Beyond the credit growth certain structural changes from SEBI like framework for AA and above rated companies to borrow 25% from the bond market, incentives from RBI to corporates to borrow from bond market rather than banks, could auger well for the bond market. • This year has another geopolitical risk in the form of elections in more than 60 countries, including US. The outcome of these elections has potential to impact global business sentiments. • They would make accelerated investment towards talent and technology. • They would also continue to focus on customer centric innovation and solutions which would address the niche needs of their clients. • They continue to focus on expanding their reach to Tier 2 & Tier 3 institutions through its partnership channels in the research division. • They anticipate the capital market issuances will revive in the H2 CY24 with softening interest rates and gradual revival of private sector capex. • As majority of the revenue is generated outside India, so the company faces the currency risk which would be a key monitorable factor going forward. • They continue to drive opportunity in emerging markets, Middle East, South Asia and Africa for the infrastructure advisory space. They are also in discussion across multilateral agencies and different countries to increase investments on infrastructure. • The ESG rating is likely an opportunity for the company in the ratings business, going forward.

CRISIL 4800-5240
Expected level 6000
Support 4400

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Tata Consumer 870-970
Expected level 1200
Support 800

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Motilal Oswal on Tata Power ⚡

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● Capex Surge: ₹1.46 lakh crore planned over 5 years, 3x the previous period 💸

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Berger Paints India Limited Company Research Report

Berger Paints India Limited is a leading paint company in India with 29 manufacturing units globally, including 25 in India (including subsidiaries), 2 in Nepal, and one each in Poland and Russia. The company launched 43 new products during the year. In FY24, its capacity stood at 1.27 million metric tonne. In the decorative paints sector, Berger Paints is the second-largest company in India. It leads in protective and infrastructure coatings, and is a notable player in auto paints, serving two-wheelers, commercial vehicles, and tractors, as well as passenger cars, threewheelers, and SUVs through a joint venture with Nippon Paints. The company is also dominant in the general industrial segment, supported by its subsidiary SBL Specialty Coatings Ltd., and extends its services to white goods and consumer durables through powder coating, which contributes a smaller share to its overall revenue mix. Company’s Prolinks division, catering to the B2B and architectural segment looks into the protection and aesthetic needs of landmark and heritage buildings, flyovers, metro stations, airports as well as large residential complexes and industries in all parts of the country and are addressed by a specialized business team. The Berger’s Protecton caters to pipe coatings, refinery projects, railways, iron and steel plants, road marking business, thermal power plants, floorcoating and airport. Protecton has coated more than 5,000 Rajdhani coaches in the last two years. Its involvement in key ventures like Vande Bharat and projects at the Rajasthan Refinery and Lucknow Adani Airport underscores its leadership position and continued advantage in the infrastructure landscape. The company's pan-India presence is reinforced by a robust distribution network of over 64,000 dealers and retailers. In Q2 FY25, the company undertook distribution expansion and added 2,200 retail touchpoints. Additionally, 2,000 Colorbank machines were added, and new advanced machines were acquired for R&D activities. Notable projects in the powder coating business included Chenab Bridge, IICC (India International Convention & Expo Centre) Yashabhoomi and Chennai airport. The company has five wholly-owned subsidiaries: Beepee Coatings Private Limited in Gujarat, Berger Paints (Cyprus) Limited and Lusako Trading Limited in Cyprus, Berger Jenson & Nicholson (Nepal) Private Limited in Nepal, and SBL Specialty Coatings Private Limited in Chandigarh.

#SALES #GROWTH 5 Year CAGR 13.1%

In FY24, the net sales increased by 6% YoY and stood at ₹11,199 cr. Value and volume growth were 5.6% and 11.6%, respectively, with value growth moderating due to product price reductions. Projects business constitutes ~8% of decorative paints category. In the industrial segment, the Protective Coating business maintained its market dominance, achieving consistent growth and profitability enhancements. In H1 FY25, revenue witnessed a growth of 1% YoY at ₹5,866 cr. Volume growth outpaced value growth, however still remained moderate due to extended monsoon and flooding in certain key markets. Price hike of ~2.3% was undertaken in Q2 FY25. During the quarter, premium and luxury products witnessed good traction with double-digit volume growth.

#EBITDA #GROWTH 5 Year CAGR 14.7%

In FY24, EBITDA stood at ₹1,861 cr and grew by 25% YoY. Softening of raw material prices compared to previous years led to this growth. To address the drop in raw material prices, the company implemented two price cuts: ~1.2% in November 2023 and ~4% in mid-January 2024. In H1 FY25, EBITDA de-grew by 7% YoY to ₹957 cr impacted by high cost inventory. However, moderation in the cost was witnessed in September 2024. Employee cost increased by 16% as additional manpower was hired to increase penetration in the urban markets. Gross profit improved by 2% to ₹2,390 cr on the back of improvement in product mix.

#PAT #GROWTH 5 Year CAGR 18.8%

In FY24, the net profit growth was 29% YoY at ₹1,129 cr. Majority of the growth can be attributed to rise in operating profit and also there was profit from its joint venture entities which had reported losses last year. Tax rate for the year was ~25%. In H1 FY25, PAT stood at ₹605 cr, decreasing by 5% YoY. Other income doubled to ₹57 cr from ₹29 cr in H1 FY25.

#EBITDA #MARGIN

In FY24, the EBITDA margin was 16.6% and expanded by ~255 bps. Gross margin increased by ~440 bps. The disparity in gross margin and EBITDA margin was due to additional advertising expenses and extra costs associated with the new Sandila plant. EBITDA margin contracted by 150 bps YoY to 16.3% in H1 FY25 majorly due to increased employee cost. Gross margin expanded by 30 bps on a YoY basis at 40.7%.