Crisil miss estimate amid slowing research business

Credit rating agency Crisil fell short of revenue estimate by 11 per cent over its declining research revenues and despite a strong growth in its rating business, Centrum said in a report.

The report noted that Crisil falls in line with a decline in demand for the risk analytics industry globally owing to the changing regulatory milestones as well as better preparedness across large banks.

"Crisil's Q1CY19 results fell short of our revenue estimate by 11 per cent, primarily due to a large sequential drop in research revenues and also a sequential decline in rating revenues. Research growth was impacted by headwinds on global research," it said.

The research segment's Q1CY19 Earnings before interest and taxes (EBIT) margin dropped to 25.7 per cent as against 31 per cent in Q1CY18. It has been impacted owing to maturing US regulations.

"To overcome this, Crisil has undertaken initiatives that include extending the reach to buy-side clients, product solutions, etc. Crisil Coalition -- Athe company is a business intelligence provider -- saw traction with new client acquisitions, product offerings and data analytics," the report added.

However, the company's rating business reported strong growth following a rise in corporate bond market issuances, with new client acquisitions in both the large and the mid-corporate segments and securitisation transactions reporting strong pick-up.

--IANS

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