CRISIL Ltd:Annual Report 2023-24 Analysis

CRISIL Ltd: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History: CRISIL (Credit Rating Information Services of India Limited) was established in 1987 as India’s first credit rating agency. It was promoted by ICICI Ltd., UTI, and several leading Indian financial institutions.

Headquarters Location and Global Presence: The company’s headquarters are located in Mumbai, India. CRISIL has a global presence with operations and offices in various countries including the United States, the United Kingdom, Argentina, Poland, Hong Kong, Singapore, China and Mauritius.

Company Vision and Mission:

• Vision: To be the leading provider of ratings, research, analytics and risk solutions globally.
• Mission: To provide independent, objective and insightful opinions and solutions to help clients make better decisions.

Key Milestones in their Growth Journey:

• 1987: Established as India’s first credit rating agency.
• 2005: Standard & Poor’s acquired a majority stake in CRISIL.
• 2016: S&P Global acquired 100% ownership of CRISIL.
• Continued expansion into research, analytics, and risk solutions, diversifying beyond credit ratings.

Stock Exchange Listing Details and Market Capitalization: CRISIL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). As of October 26, 2023, its market capitalization is approximately ₹26,636 crores.

Recent Financial Performance Highlights:

• For the quarter ended June 30, 2023, CRISIL reported a consolidated revenue of ₹866.8 crore, up 18.6% year on year.
• Profit after tax was ₹150.2 crore, up 21.6% year on year.

Management Team and Leadership Structure: The company is led by a team of experienced professionals. An Executive Director and CEO is in place. The board includes independent directors and representatives from S&P Global.

Notable Awards or Recognitions:

• CRISIL has received numerous awards and recognitions for its research, ratings, and analytics services from various industry publications and organizations.

Their Products #

Complete Product Portfolio with Categories:

• Ratings: Credit ratings for companies, banks, and other financial institutions, as well as for debt instruments.
• Research: Industry research, economic forecasts, and equity research.
• Analytics: Risk management solutions, data analytics, and modeling services.
• Solutions: ESG and sustainability solutions, valuation and advisory services, and regulatory solutions.

Flagship or Signature Product Lines: CRISIL Ratings, CRISIL Research.

Quality Certifications and Standards: CRISIL maintains high standards of quality and adheres to global best practices in its operations.

Recent Product Launches or R&D Initiatives: CRISIL consistently invests in R&D to develop new products and solutions that meet the evolving needs of its clients. Recent initiatives include ESG rating services and advanced risk analytics platforms.

Primary Customers #

Target Industries and Sectors:

• Financial Institutions (Banks, Insurance Companies, NBFCs)
• Corporates (Across various sectors)
• Government Agencies
• Investors
• Infrastructure Companies

Geographic Markets (Domestic vs. International): CRISIL has a significant presence in the Indian market and is expanding its international operations.

Major Competitors #

Direct Competitors in India and Globally:

• India: ICRA, CARE Ratings
• Globally: S&P Global Ratings, Moody’s Investors Service, Fitch Ratings

Comparative Market Share Analysis: CRISIL holds a significant market share in the Indian credit rating market. However, specific market share data fluctuates.

Competitive Advantages and Disadvantages:

• Advantages: Strong brand reputation, deep understanding of the Indian market, and a comprehensive suite of services.
• Disadvantages: Competition from global players with greater resources.

How they differentiate from competitors: CRISIL differentiates itself through its deep industry knowledge, strong analytical capabilities, and focus on providing independent and objective assessments.

Market Positioning Strategy: CRISIL positions itself as a trusted and reliable provider of ratings, research, and analytics services, helping clients make informed decisions.

Future Outlook #

Expansion Plans or Growth Strategy: CRISIL is focused on expanding its presence in high-growth areas such as ESG ratings, risk analytics, and data solutions. The company is also looking to expand its international footprint.

Industry Trends Affecting their Business:

• Increasing demand for credit ratings and risk assessments.
• Growing focus on ESG and sustainability.
• Rapid technological advancements and the increasing importance of data analytics.
• Evolving regulatory landscape.

Long-term Vision and Strategic Goals: CRISIL aims to solidify its position as a leading provider of ratings, research, analytics and risk solutions globally, enabling clients to make better decisions in an increasingly complex and uncertain world.

CRISIL Limited - Financial Analysis Report (2024) #

Comprehensive Performance Overview #

Financial Performance (3-Year Trend Analysis) #

• Revenue: Consolidated income from operations grew 3.6% YoY to ₹3,349.42 crore in 2024 from ₹3,233.16 crore in 2023. Standalone income rose marginally to ₹2,165.58 crore from ₹2,121.62 crore. Growth momentum was supported by the Ratings business, particularly in H2 2024.
• Profitability: Consolidated Profit Before Tax (PBT) increased to ₹926.47 crore in 2024 from ₹867.70 crore in 2023 (Note: 2023 included a one-off gain of ₹29.4 crore from Argentinian peso devaluation). Consolidated Profit After Tax (PAT) grew to ₹684.07 crore from ₹658.44 crore. Standalone PBT decreased to ₹705.42 crore from ₹763.38 crore, and PAT decreased to ₹615.88 crore from ₹668.26 crore, potentially reflecting subsidiary performance contributions or cost structures.
• Margins: Consolidated operating profit margin (EBITDA/Total Income) remained stable at 30% for 2024 and 2023, consistent with 29% in 2022. Net Profit Margin was also stable at 20% for 2024, 2023, and 2022.
• Return Ratios: Return on Net Worth (RoNW) was 29% in 2024, a decrease from 33% in both 2023 and 2022, suggesting slightly lower efficiency in generating profit from shareholder equity in the latest year.
• Efficiency: Debtor turnover ratio improved to 5.2 times in 2024 from 4.3 times in 2023, indicating faster receivables collection. Current ratio remained healthy at 2.0 times (2.1 times in 2023).
• Capital Structure: Market capitalisation stood at ₹38,251 crore as of Dec 31, 2024, up from ₹32,461 crore in 2023. The company maintains an asset-light model with strong free cash flow. Total dividend proposed for 2024 is ₹56 per share, up from ₹54 in 2023.

Business Segment Performance #

• Ratings Services:
  • Revenue grew 17.4% YoY in 2024, driven by strong corporate bond issuances (up 11.7% industry-wide) in H2 and sustained market leadership. Bank Loan Ratings (BLR) activity reflected moderated bank credit growth (11.2% in 2024 vs 15.6% in 2023).
  • Maintained leadership despite competitive intensity, aided by investor preference for quality. Credit quality outlook remains positive (Credit Ratio > 1x).
  • Global Analytics Centre (GAC) grew via expanded surveillance support for S&P Global Ratings and new service areas.
  • Launched Crisil ESG Ratings & Analytics Limited, securing a Category 1 SEBI license.
  • Continued thought leadership through events (Infrastructure Summit, NBFC Seminar) and publications.
• Research, Analytics and Solutions:
  • Crisil Intelligence (formerly Market Intelligence & Analytics): Gained momentum, particularly in infrastructure consulting (roads, renewables, urban infra) driven by government initiatives. Industry research saw demand for thematic studies. Fixed income indices remained preferred. Credit+ ICON and Early Warning Solutions (EWS) showed strong traction. Integrated GenAI into Credit+ ICON.
  • Crisil Integral IQ (formerly Global Research & Risk Solutions): Impacted by curtailed discretionary spending by global financial clients. Showed momentum in buy-side offerings (middle office, operations). Credit risk & lending solutions saw traction amid bank transformation needs. Progress made in leveraging GenAI for client solutions and risk assessments. Finance transformation and regulatory reporting saw activity.
  • Crisil Coalition Greenwich (formerly Global Benchmarking Analytics): Maintained leadership in Corporate & Investment Banking (CIB) benchmarking despite budget pressures. Scaled product offerings and client engagement drove demand from large commercial banks. Growth noted in Commercial & Community Banking driven by digital programs. Investing in offerings for private credit and regional banks.
  • Recognition: Awarded Chartis RiskTech100® Model Validation category leader (3rd consecutive year) and ranked 37th overall. Recognized as category leader in multiple Chartis quadrants (Credit Risk, Portfolio Management, Regulatory Reporting, Lending Operations, Model Risk).

Major Strategic Initiatives & Progress #

• Technology Transformation: Significant investments in digital infrastructure, AI/ML, and GenAI. Launched GenAI Credit Assessment solution. Developed proprietary platforms/accelerators (Quantix, SEM, Q2, Fulkrum, Myron AI, Prospect Match, Phoenix). Ongoing employee training in GenAI.
• Brand Transformation: Undertook strategic rebranding to position CRISIL as a global, insights-driven analytics organization with a cohesive identity across segments (Crisil Ratings, Intelligence, Coalition Greenwich, Integral IQ).
• Market Presence: Enhanced brand visibility through flagship events (India Outlook, Competitive Challenges Conference, etc.) and thematic reports/publications across Indian and global markets.
• Structural Changes: Approved merger of Bridge to India with Crisil Ltd. Approved business transfer of Peter Lee Associates Pty Ltd to Crisil Australia. Operationalized Crisil ESG Ratings & Analytics Limited subsidiary with SEBI license.
• S&P Global Collaboration: Leveraged partnership for governance insights, brand referrals, and cross-selling opportunities. Key collaboration is GAC support for S&P Global Ratings. Joint initiatives included reports, data integration (CapIQ), events, and platform hosting (Credit+ ICON).

Risk Landscape Changes & Management #

• Maintained a robust risk management framework with Board and Committee oversight (RMCB, IRMC).
• Key Identified Risks & Mitigation:
  • Cybersecurity: Increasing threats mitigated by strengthening framework (CISO-led), enhancing perimeter/data security (DLP), cloud security protocols, ISO 27001/SOC2 compliance, incident response, continuous monitoring, and stakeholder awareness training/simulations.
  • Macroeconomic/Geopolitical: Persistent inflation, rate volatility, geopolitical tensions impacting client spending. Mitigated by revenue diversification (products/geographies), agile sales/delivery, and monitoring global developments. Client concentration risk addressed via new client acquisition and broader product offerings.
  • GenAI Disruption: Potential workflow disruption balanced by active investment in AI adoption, enhancing efficiency and creating innovative solutions via a dedicated task force. Focus on responsible integration and IP protection.
  • Competitive Intensity: Heightened competition met by emphasizing differentiated value (innovation, expertise, client engagement), strengthening key relationships, targeting new segments/geographies, and investing in talent/technology.
  • People Risk: Attrition/skill gaps mitigated via robust hiring, leadership development, succession planning.

Detailed Analysis #

Crisil Limited: Financial Analysis - FY24 Balance Sheet #

Analysis Period and Context #

Fiscal Year ended December 31, 2024 (FY24) vs. Fiscal Year ended December 31, 2023 (FY23). Consolidated data. Amounts are in ₹ crore. Comparisons are year-over-year (YoY).

Comparative Analysis (Assets, Liabilities, Equity) #

The company’s consolidated balance sheet expanded moderately in FY24.

Significant Changes in Major Line Items (>10% YoY) #

Several line items experienced significant fluctuations, largely influenced by lease accounting and investment activities.

CRISIL Limited - FY2024 Financial Analysis #

Consolidated Performance Overview (FY2024 vs FY2023) #

• Total Income: Increased by 3.6% to ₹3,349.42 crore from ₹3,233.16 crore.
• Profit Before Tax (PBT): Grew by 6.8% to ₹926.47 crore from ₹867.70 crore.
• Profit After Tax (PAT): Rose by 3.9% to ₹684.07 crore from ₹658.44 crore.
• Overall Growth: Modest top-line growth with slightly better expansion in profitability, aided significantly by lower depreciation/amortization despite increased operating expenses.

Revenue Analysis #

Segmental Performance (Consolidated) #

• Ratings Services: Revenue grew strongly by 17.4% YoY, reaching ₹909.6 crore (28% of total operating revenue, up from 25% in FY23). Growth driven by healthy bond issuances in H2 2024 and market leadership. Global Analytics Center (GAC) also contributed via support to S&P Global.
• Research, Analytics and Solutions: Revenue saw a marginal decline of 0.4% YoY to ₹2,350.2 crore (72% of total operating revenue, down from 75% in FY23). Performance was mixed:
  • Crisil Intelligence: Gained momentum in consulting (infra, local development), industry research, and risk offerings (Credit+ICON, EWS).
  • Crisil Integral IQ: Impacted by curtailed discretionary spending by global financial clients, though buy-side offerings showed momentum and progress was made in GenAI solutions.
  • Crisil Coalition Greenwich: Benefitted from momentum in Corporate & Investment Banking (CIB) and scaling of product offerings.

Geographical Performance (Consolidated) #

• India: Revenue grew 16.5% YoY to ₹986.1 crore (30% share).
• North America: Revenue grew 0.5% YoY to ₹1,276.1 crore (39% share).
• Europe: Revenue declined 8.6% YoY to ₹710.5 crore (22% share).
• Rest of the World: Revenue grew 16.8% YoY to ₹287.1 crore (9% share).
• Growth was primarily driven by India, while North America remained stable. Europe faced headwinds.

Cost Structure Analysis (Consolidated) #

• Total Expenses: Increased by 2.4% YoY to ₹2,422.95 crore.
• Employee Benefits Expense: Grew 1.2% YoY to ₹1,767.0 crore, remaining the largest cost component at 52.7% of total income (vs. 54.0% in FY23).
• Other Expenses: Increased significantly by 13.2% YoY to ₹584.9 crore, representing 17.5% of total income (vs. 15.9% in FY23). Key drivers were increased repairs & maintenance and professional fees.
• Depreciation and Amortisation: Decreased sharply by 38.5% YoY to ₹66.6 crore (2.0% of total income vs. 3.3% in FY23).
• Finance Costs: Remained minimal at ₹4.9 crore (0.1% of total income).

Profitability and Margin Analysis (Consolidated) #

• PBT Margin: Improved to 27.7% from 26.8% in FY2023.
• PAT Margin: Remained stable at 20.4% (vs. 20.4% in FY2023).
• Operating Profit Margin (EBITDA Margin): Stable at 30%.
• Segment Profitability:
  • Ratings Services segment margin improved to 43.8% (₹398.5 cr / ₹909.6 cr) from 42.7% in FY23.
  • Research, Analytics & Solutions segment margin decreased slightly to 21.6% (₹507.8 cr / ₹2,350.2 cr) from 20.8% in FY23.

Operating Leverage #

• Consolidated revenue grew 3.6%, while EBITDA grew 2.1%, suggesting slightly negative operating leverage at the EBITDA level, likely influenced by the disproportionate rise in Other Expenses.
• However, PBT grew faster than revenue (6.8%), indicating positive leverage below the EBITDA line, primarily due to the substantial decrease in Depreciation & Amortisation expense.

Significant / Non-Recurring Items #

• FY2023 PBT included a one-off gain of ₹29.4 crore from Argentinian peso devaluation. Excluding this, underlying PBT growth for FY2024 is higher than the reported 6.8%.

Crisil Limited Financial Analysis: FY2024 Cash Flow #

Operating Cash Flow (OCF) #

Net cash generated from operating activities decreased slightly to ₹76,031 lakh in FY2024 from ₹78,222 lakh in FY2023. Despite higher Profit Before Tax (PBT) of ₹92,647 lakh (vs. ₹86,770 lakh), the decrease in OCF was influenced by significant movements in working capital and a substantial increase in taxes paid (₹31,008 lakh vs. ₹24,183 lakh). Notably, improvements in trade receivable collections (inflow of ₹12,198 lakh vs. ₹6,838 lakh) and extended trade payables (inflow of ₹4,282 lakh vs. ₹440 lakh) positively impacted OCF.

Investing Cash Flow (ICF) #

Net cash used in investing activities increased to ₹38,992 lakh in FY2024 from ₹32,937 lakh in FY2023. This higher outflow was primarily driven by a significant increase in the purchase of property, plant, equipment (PPE), and intangible assets, amounting to ₹17,149 lakh.

Financial Ratio Analysis: Crisil Limited (Year Ended December 31, 2024) #

Note #

This analysis is based solely on the provided excerpts of Crisil Limited’s Annual Report 2024. Calculations use consolidated figures unless specified otherwise or where standalone provides additional insight. Ratios are calculated based on year-end figures or averages where appropriate and data permits.

Profitability Ratios #

Return on Net Worth (ROE) #

Consolidated ROE decreased to 29% in 2024 from 33% in 2023 and 33% in 2022. Standalone PAT decreased from INR 668.26 Cr in 2023 to INR 615.88 Cr in 2024, while standalone equity increased.

Operating Profit Margin (EBITDA/Total Income) #

The consolidated operating profit margin remained stable at 30% in 2024, consistent with 30% in 2023 but slightly up from 29% in 2022.

Net Profit Margin (PAT/Total Income) #

The consolidated net profit margin was stable at 20% for 2024, 2023, and 2022. Standalone PAT decreased while standalone total income saw a marginal increase.

Liquidity Ratios #

Current Ratio #

The consolidated current ratio slightly decreased to 2.0 times in 2024 from 2.1 times in 2023, following an increase from 1.9 times in 2022. Standalone Current Ratio calculation: (Current Assets INR 1298.44 Cr / Current Liabilities INR 565.12 Cr) = 2.30 times for 2024, compared to (INR 1280.18 Cr / INR 475.86 Cr) = 2.69 times for 2023.

Quick Ratio (Acid-Test Ratio) #

Consolidated: ~2.0 times (2024), ~2.1 times (2023). Standalone: ~2.30 times (2024), ~2.69 times (2023).

Cash Ratio #

Consolidated: (Cash & Equivalents INR 306.10 Cr + Current Investments INR 1064.17 Cr) / Current Liabilities INR 1090.78 Cr = 1.26 times (2024). Compared to 2023: (INR 366.12 Cr + INR 778.01 Cr) / INR 987.29 Cr = 1.16 times. Standalone: (INR 99.57 Cr + INR 719.81 Cr) / INR 565.12 Cr = 1.45 times (2024). Compared to 2023: (INR 107.18 Cr + INR 564.19 Cr) / INR 475.86 Cr = 1.41 times.

Efficiency Ratios #

Debtor (Receivables) Turnover Ratio #

The consolidated ratio improved significantly to 5.2 times in 2024 from 4.3 times in 2023 and 4.1 times in 2022. Standalone calculation: Revenue INR 1664.89 Cr / Average Receivables ((INR 284.59 Cr + INR 375.82 Cr)/2) = 5.04 times (2024), compared to INR 1628.36 Cr / ((INR 375.82 Cr + Prev. Year Avg)/2).

Asset Turnover Ratio #

Consolidated: Revenue INR 3259.78 Cr / Average Total Assets ((INR 3943.65 Cr + INR 3297.39 Cr)/2) = 0.90 times (2024). Compared to 2023: INR 3139.52 Cr / ((INR 3297.39 Cr + 2022 Assets)/2). Standalone: Revenue INR 1664.89 Cr / Average Total Assets ((INR 2608.79 Cr + INR 2048.83 Cr)/2) = 0.72 times (2024). Compared to 2023: INR 1628.36 Cr / ((INR 2048.83 Cr + 2022 Assets)/2).

Inventory Turnover Ratio #

Not applicable as Crisil is a service-based company with no significant inventory.

Leverage Metrics #

Debt-to-Equity Ratio #

Consolidated Total Debt (primarily Lease Liabilities) = INR 250.21 Cr (Current INR 46.48 Cr + Non-Current INR 203.73 Cr). Total Equity = INR 2564.86 Cr. Ratio = 250.21 / 2564.86 = 0.10 times (2024). Compared to 2023: Debt INR 47.32 Cr / Equity INR 2189.45 Cr = 0.02 times. Standalone: Debt INR 225.86 Cr / Equity INR 1786.31 Cr = 0.13 times (2024). Compared to 2023: Debt INR 37.33 Cr / Equity INR 1489.82 Cr = 0.03 times.

Interest Coverage Ratio #

Consolidated: EBIT (Proxy: PBT INR 926.47 Cr + Finance Costs INR 4.06 Cr) / Finance Costs INR 4.06 Cr = 229 times (2024). Compared to 2023: (PBT INR 867.70 Cr + Finance Costs INR 3.66 Cr) / INR 3.66 Cr = 238 times. Standalone: EBIT (Proxy: PBT INR 705.42 Cr + Finance Costs INR 3.11 Cr) / Finance Costs INR 3.11 Cr = 228 times (2024). Compared to 2023: (PBT INR 763.38 Cr + Finance Costs INR 3.28 Cr) / INR 3.28 Cr = 234 times.

Crisil Limited Financial Analysis - 2024 #

Revenue and Profitability Metrics #

• Consolidated Revenue: Increased by 3.6% YoY to ₹3,349.42 crore.
• Consolidated PBT: Grew to ₹926.47 crore.
• Consolidated PAT: Increased to ₹684.07 crore.
• Standalone Revenue: Increased marginally to ₹2,165.58 crore.
• Standalone PBT: Declined YoY to ₹705.42 crore.
• Standalone PAT: Declined YoY to ₹615.88 crore.
• Margins (Consolidated): Operating Profit Margin remained stable at 30%. Net Profit Margin also remained stable at 20%.
• Dividend: Total proposed dividend is ₹56 per share, up from ₹54 per share in 2023.

Market Share and Competitive Position #

• Ratings: Maintained market leadership in India’s corporate bond market.
• Research, Analytics & Solutions: Recognized as a category leader by Chartis Research in Model Validation and multiple credit risk/regulatory reporting solution quadrants. Credit+ ICON solution is noted as a market leader in India.
• Competitive Landscape: Increasing competitive intensity from both global players and local competitors.

Key Products/Services Performance #

• Ratings Services: Revenue grew 17.4% YoY, driven by healthy corporate bond issuances and sustained bank loan rating (BLR) activity. Crisil ESG Ratings & Analytics Limited, received SEBI approval as a Category 1 ESG Rating Provider.
• Global Analytics Centre (GAC): Growth driven by increased surveillance support for S&P Global Ratings analytical practices and support in new areas across S&P Global.
• Crisil Intelligence: Gained momentum, particularly in consulting services driven by government infrastructure initiatives and local economic development. Strong demand for Early Warning Solution (EWS) post-RBI circular. Integrated GenAI into Credit+ ICON solution.
• Crisil Integral IQ: Performance impacted by curtailed discretionary spending and cost-cutting by financial services clients.
• Crisil Coalition Greenwich: Showed momentum in Corporate & Investment Banking (CIB) driven by product scaling and client engagement.

Geographic Distribution and Market Penetration #

• Revenue Breakdown (Consolidated 2024): North America (39%), India (30%), Europe (22%), Rest of the World (9%).
• Global Presence: Operates globally with offices/clients across multiple regions.
• Market Penetration: Serves top investment banks, commercial banks, and global asset managers. 90% of India’s banking industry (by assets) are clients (Intelligence).

Segment-wise Capex #

• Capital Expenditure (Consolidated 2024): Capitalised ₹409.06 crore

Risk Framework #

Crisil Limited - Risk Analysis Report (Based on Annual Report 2024) #

Strategic Risks #

Macroeconomic and Geopolitical Uncertainty #

• Severity: High.
• Likelihood: High.
• Trend: Increasing/Volatile.
• Mitigation: Diversification of revenue streams across products, services, and geographies. Agile sales and delivery approach tailored to shifting client priorities. Close monitoring of global developments.
• Control Effectiveness: Risk Management Committee (IRMC) and Board oversight. Diversification strategy appears active across business segments.
• Potential Financial Impact: Negative pressure on revenue growth and profitability due to curtailed discretionary spending by clients, project delays, or sector-specific downturns.

Competitive Intensity #

• Severity: High.
• Likelihood: High.
• Trend: Increasing.
• Mitigation: Emphasis on differentiated value proposition (innovation, domain expertise, client engagement). Strengthening key client relationships. Targeting new market segments (e.g., private credit, regional banks) and geographies. Strategic investments in talent, technology, and niche capabilities. Brand transformation to enhance global visibility.
• Control Effectiveness: Active strategies implemented, monitored by management and Board.
• Potential Financial Impact: Pressure on revenue growth and margins. Need for continuous investment to maintain competitive edge.

Market Evolution & Technological Disruption (GenAI) #

• Severity: Medium to High.
• Likelihood: High.
• Trend: Increasing Rapidly.
• Mitigation: Active investment in AI adoption. Dedicated task force evaluating integration across business segments. Leveraging GenAI for client solutions (e.g., GenAI Credit Assessment, AI Prompt database) and internal efficiency (e.g., Myron AI, Phoenix). Balancing automation with IP protection. Employee training on GenAI.
• Control Effectiveness: Proactive investment and dedicated task force indicate high awareness and engagement. Launch of specific GenAI solutions demonstrates progress.
• Potential Financial Impact: Significant potential for operational efficiencies and new revenue streams (positive). Risk of falling behind competitors or service disruption if adaptation lags (negative). Investment costs associated with technology adoption.

Operational Risks #

Cybersecurity and Data Breach #

• Severity: High.
• Likelihood: High.
• Trend: Increasing.
• Mitigation: Strengthened cybersecurity framework led by CISO. Measures include perimeter security, vulnerability management, Data Loss Prevention (DLP), cloud security protocols, incident response mechanisms, continuous monitoring. Compliance with global standards (ISO 27001, SOC 2). Regular employee training, phishing simulations, and vendor awareness programs.
• Control Effectiveness: Appears robust, supported by certifications (ISO 27001, SOC 2), dedicated CISO role, and multi-layered technical and procedural controls.
• Potential Financial Impact: Costs associated with prevention, detection, and response. Significant negative impact in case of a successful breach (remediation, fines, loss of client trust/business).

People Risk (Talent Acquisition, Retention, Skills) #

• Severity: High.
• Likelihood: Medium to High.
• Trend: Stable/Concerning.
• Mitigation: Comprehensive talent strategy: robust hiring, leadership development, succession planning (internal/lateral hiring mix). Investment in upskilling/reskilling (GenAI, data science, partnerships with institutions, hackathons). Competitive compensation benchmarking. Employee engagement measures (e.g., Chirp social network, CEO Awards). Focus on Diversity, Equity, and Inclusion (DEI) (Inclusion Forum, PRGs, global maternity pay policy). Flexible work policies, health & wellness programs.
• Control Effectiveness: Structured approach with Board (Nomination & Remuneration Committee) oversight. Multiple initiatives addressing different facets of people risk. ‘Great Place to Work’ recognition suggests positive employee perception.
• Potential Financial Impact: Increased recruitment and training costs. Productivity loss from attrition. Difficulty scaling or executing strategy if critical skills are lacking.

Business Continuity & Disaster Management #

• Severity: Medium to High.
• Likelihood: Low to Medium (event-dependent).
• Trend: Stable (standard operational risk).
• Mitigation: Formal Business Continuity Policy (BCP). Identification of critical processes, downtime tolerance, recovery methodologies. Crisis communication protocols. Technology upgrades. Use of operational risk intelligence platform for real-time alerts. Regular emergency drills and employee training.
• Control Effectiveness: Formalized plans and regular testing indicate preparedness.
• Potential Financial Impact: Revenue loss and increased operational costs during disruption. Reputational damage if client service is impacted.

Crisil Limited - Financial Analysis Report 2024 #

Executive Summary #

Crisil Limited demonstrated resilience in 2024, achieving moderate consolidated revenue growth (3.6%) amidst a complex global environment. Profitability improved, with Profit Before Tax (PBT) rising to INR 926.47 crore and Profit After Tax (PAT) reaching INR 684.07 crore, although 2023 results included a significant one-off gain. Growth was primarily driven by the Ratings segment, capitalizing on healthy domestic bond issuances, while the Research, Analytics, and Solutions segment faced headwinds from curtailed discretionary spending by global financial clients. Strategic initiatives included a major brand transformation to position Crisil as a global analytics organization, continued investment in technology (notably GenAI), talent development, and sustainability integration (including obtaining an ESG Ratings Provider license). The company maintained a strong financial position, supported by an asset-light model and robust cash flows, allowing for a recommended increase in total dividend payout. Key risks revolve around macroeconomic uncertainty, cybersecurity, competitive intensity, talent retention, and the potential impact of GenAI disruption. The outlook remains cautiously optimistic, contingent on global economic stability and client spending patterns.

Financial Performance Analysis #

Consolidated Performance #

• Revenue: Total income from operations grew 3.6% year-over-year (YoY) to INR 3,349.42 crore from INR 3,233.16 crore in 2023.
• Profitability: PBT increased to INR 926.47 crore from INR 867.70 crore (which included a one-off gain of INR 29.4 crore in 2023). PAT rose slightly to INR 684.07 crore from INR 658.44 crore.
• Margins: Operating Profit Margin (EBITDA/Total Income) remained stable at 30%. Net Profit Margin also held steady at 20%.
• Expenses: Total expenses increased moderately to INR 2,422.95 crore from INR 2,365.46 crore, primarily driven by increases in repairs & maintenance and professional fees. Employee benefit expenses constituted 53% of total income, slightly down from 54% in 2023.

Segment Performance #

• Ratings Services: Revenue grew a healthy 17.4% YoY, outperforming the other segment. This was driven by market leadership in corporate bonds (aided by strong second-half issuances and investor preference for quality) and continued analytical support to S&P Global via the Global Analytics Centre (GAC). Bank Loan Ratings (BLR) activity reflected slower overall bank credit growth.
• Research, Analytics and Solutions: This segment experienced mixed results.
  • Crisil Intelligence showed momentum, particularly in consulting (infra, government initiatives) and thematic research. Risk solutions (EWS) and Credit+ ICON saw good traction.
  • Crisil Integral IQ faced headwinds due to curtailed discretionary spending by global financial clients, although buy-side offerings saw momentum and progress was made in leveraging GenAI.
  • Crisil Coalition Greenwich benefited from momentum in Corporate & Investment Banking (CIB) and large commercial banks, despite market uncertainties.

Geographic Performance #

North America remained the largest revenue contributor (approx. 39%), followed by India (approx. 30%) and Europe (approx. 22%).

Key Ratios #

• Return on Net Worth (RoNW) moderated to 29% from 33%, potentially reflecting increased equity base or slower profit growth relative to equity.
• Debtor Turnover Ratio improved slightly from 4.3x to 5.2x, indicating potentially faster collection of receivables.
• Current Ratio remained healthy at 2.0x (vs. 2.1x prior year).

Standalone Performance #

Standalone total income showed marginal growth to INR 2,165.58 crore. However, PBT declined to INR 705.42 crore from INR 763.38 crore, and PAT decreased to INR 615.88 crore from INR 668.26 crore, suggesting higher cost pressures or shifts in business mix within the standalone entity compared to the consolidated group. Dividend income from subsidiaries is a major component of standalone ‘Other Income’.

Dividend & Capital #

The Board recommended a final dividend of INR 26 per share. Combined with interim dividends, the total dividend for 2024 is INR 56 per share, up from INR 54 in 2023, reflecting confidence in performance and cash flows. Issued capital increased slightly due to the exercise of employee stock options (ESOS).

Strategic & Operational Highlights #

• Market Position & Brand: Crisil reinforced its leadership, particularly in the Indian ratings market. The strategic brand transformation aims to unify business segments (Crisil Ratings, Crisil Intelligence, Crisil Coalition Greenwich, Crisil Integral IQ) under a cohesive global identity. Recognitions like the Chartis RiskTech100® award for Model Validation underscore domain expertise.
• Technology & Innovation: Significant investments are being made in technology, with a focus on GenAI, cloud, and agile development. Products like Quantix, SEM, Q2, Myron AI, Prospect Match, and Phoenix highlight IP creation and the use of AI/ML for efficiency and client solutions (e.g., GenAI Credit Assessment). Employee training in GenAI is underway.
• Sustainability/ESG: ESG is integrated into the business. Crisil ESG Ratings & Analytics Limited received its SEBI license as a Category 1 ESG Rating Provider. The company published both a BRSR (part of Annual Report) and a separate ESG report for 2024, with core BRSR metrics receiving ‘Reasonable Assurance’. Sustainability highlights include emission reductions, increased renewable energy use (67%), waste recycling (91%), tree plantation (70,000+), and supply chain sustainability initiatives.
• Human Capital: Recognized as a ‘Great Place to Work®’ and among ‘India’s Best Workplaces™ for Women 2024’. Focus on integrated talent management, upskilling (especially in AI), leadership development, and inclusion (formalized Inclusion Forum, enhanced maternity benefits). Employee engagement remains a priority (e.g., ‘Chirp’ internal network, Innovation Jam).
• Collaboration & Outreach: Continued strong collaboration with parent S&P Global across various segments (GAC support for S&P Ratings, joint research, data sharing, referrals). Extensive market engagement through flagship events (India Outlook, Infrastructure Summit, NBFC Seminar), regional conclaves, webinars, and publications enhanced brand visibility and thought leadership.
• Corporate Actions: Strategic streamlining includes the proposed merger of Bridge to India Energy Private Limited into Crisil Limited and the business transfer/deregistration involving Peter Lee Associates Pty Limited in Australia.

Risk Analysis #

The MD&A outlines a comprehensive risk management framework overseen by the Board and internal committees. Key risks and mitigation strategies include:

• Cybersecurity & Data Breach: Mitigated by strengthening the security framework (CISO-led), enhancing perimeter/data protection (DLP), adopting cloud security, benchmarking against ISO 27001, incident response planning, continuous monitoring, and employee/vendor training/awareness (phishing simulations).
• Macroeconomic & Geopolitical Risks: Addressed by diversifying revenue streams (new products, geographies), monitoring global developments for agility, and broadening the client base to reduce concentration risk.
• GenAI Disruption: Managed by active investment in AI adoption (dedicated task force), balancing automation with IP protection, and leveraging AI for efficiency and new solutions.
• Competitive Intensity: Countered by emphasizing differentiated value (innovation, expertise, client engagement).

ESG Framework #

Environmental Metrics and Targets #

• Emissions: Reported a 64% reduction in Scope 1 and Scope 2 carbon emissions compared to the 2019 baseline. Committed to the Science Based Targets initiative (SBTi) framework. Scope 3 emissions constitute 86% of the total, with efforts focused on data collection from suppliers (targeting top 75% by value) and tracking business travel emissions.
• Energy: 67% of energy consumption was sourced from renewable sources in 2024, up from 58% in 2023. Three offices (Mumbai, Pune, Ahmedabad) migrated to green energy during the year. 33% of office area is certified under IGBC’s LEED program.
• Waste & Resources: 91% of office waste in India was recycled. 90% of paper used for office printing in India is classified as eco-friendly.
• Water: Water conservation measures include recycling (5.1% of consumption reported for specific offices), use of low-flow fixtures, and CSR initiatives creating water harvesting structures in Rajasthan and Maharashtra.
• Biodiversity/Afforestation: Through the ‘Crisil RE’ CSR program, 70,000 saplings were planted in 2024, bringing the cumulative total to over 278,000 trees. 96,500 trees were maintained during the year.
• Initiatives: Piloted the use of electric vehicles (EVs) for airport transfers in major Indian cities. Transitioned to a new ‘green office’ in Mumbai featuring natural light optimization, motion sensor lighting, and smart elevators.
• Reporting & Assurance: Sustainability reporting references GRI and SASB standards. The 2024 report obtained external ‘Reasonable Assurance’ on BRSR Core indicators and limited assurance on other metrics from DNV.

Social Responsibility Programs #

• Community Engagement (CSR):
  • Spent 7.66 crore on CSR activities against an obligation of 7.39 crore in 2024.
  • Mein Pragati: Flagship financial capability program reached over 1.3 million rural community members in Assam and Rajasthan via 5,200+ ‘Sakhis’. Cumulatively supported >3 million individuals with >2.2 million linkages to financial/welfare services.
  • MoneyWise CFL: Implemented 675 RBI-sponsored Centres for Financial Literacy across 100,000+ villages.
  • GramShakti: Online certification program reached 6,000+ users (community cadre), certifying over 2,900.
  • Livelihoods: Pilot project in Rajasthan expanded to train 133 rural women in rug making, enabling income generation.
  • Crisil RE: Environmental conservation program involving sapling plantation and water conservation (details under Environment).
  • Employee Volunteering: Recorded 4,571 employee volunteering hours, including initiatives like ‘#SapnoKiGullak’ (piggy bank painting) and ‘Daan Utsav’.
• Employee Well-being & Development:
  • Recognized as a ‘Great Place to Work®’ (5th consecutive year) and among ‘India’s Best Workplaces™ for Women 2024’.
  • Workforce comprises 40% women and 40+ unique nationalities.
  • Launched ‘Chirp’ internal social network to foster collaboration.
  • Conducted innovation initiatives like ‘Innovation Jam’ and ‘IdeaQuest Hackathon’.
  • Invested in upskilling, particularly in GenAI, data science, and leadership development programs. Average training hours per employee was 19.05.
  • Formalized an ‘Inclusion Forum’ sponsored by the CEO. Conducted inclusion-themed events, trainings, reverse mentoring, and launched an Inclusion Handbook.
  • Enhanced health benefits (medical coverage, online OPD) and introduced a global maternity pay policy (26 weeks full pay).
  • Maintained comprehensive Health & Safety policies and conducted assessments (100% coverage for India/major overseas offices for key areas). 86% of employees trained on H&S.
• Supply Chain:
  • 31% of procurement (India spend) sourced from MSME vendors.
  • Vendors representing 22% of annual procurement spend were trained on sustainability; vendors representing 15% were assessed for sustainability practices.
  • Supplier Code of Conduct emphasizes ethical practices, human rights, H&S, and environmental compliance.

Governance Structure and Effectiveness #

• Board Structure: Comprises 8 directors: 1 Executive (MD & CEO), 7 Non-Executive (including 4 Independent). Chairman is Non-Executive. 25% are women directors. Majority Non-Executive (87.5%), 50% Independent.
• Committees: Established committees (Audit, Risk Management, Nomination & Remuneration, Stakeholders’ Relationship, CSR) with defined charters and frequencies of review. Independent directors chair Audit, Nom & Rem, Stakeholders’, and CSR committees.

CRISIL Limited - Financial Analysis Report 2024 #

Financial Performance Overview (Consolidated) #

• Revenue Growth: Consolidated total income increased by 3.6% to ₹3,349.42 crore. Revenue from operations grew to ₹3,259.78 crore.
• Profitability:
  • PBT grew by 6.8% to ₹926.47 crore.
  • PAT increased by 3.9% to ₹684.07 crore.
  • Operating Profit Margin remained stable at 30%.
  • Net Profit Margin remained stable at 20%.
• Expenses: Total expenses rose by 2.4% to ₹2,422.95 crore, driven by increases in employee benefits (up 1.1% to ₹1,765.58 crore) and other expenses (up 13.5% to ₹587.85 crore).
• Key Ratios (Consolidated):
  • Return on Net Worth: 29%
  • Debtor Turnover Ratio: Improved to 5.2 times.
  • Current Ratio: Slightly decreased to 2.0 times.
• Dividend: Total recommended dividend for 2024 is ₹56 per share.
• Capital Structure: Issued, subscribed, and paid-up capital increased slightly. Other equity grew substantially to ₹2,557.51 crore.

Financial Performance Overview (Standalone) #

• Revenue Growth: Standalone total income increased by 2.1% to ₹2,165.58 crore. Revenue from operations grew to ₹1,664.89 crore.
• Profitability:
  • PBT decreased by 7.6% to ₹705.42 crore.
  • PAT decreased by 7.9% to ₹615.88 crore.
• Expenses: Standalone expenses increased by 7.5% to ₹1,460.16 crore, driven mainly by employee benefits (up 8.8%) and other expenses (up 10.4%).

Segment Performance Analysis #

Ratings Services #

• Experienced strong revenue growth of 17.4% YoY in 2024.
• Bank Loan Ratings (BLR) activity moderated.
• Global Analytics Centre (GAC) growth driven by surveillance support and expansion.
• CRISIL ESG Ratings & Analytics Limited received SEBI approval.
• Outlook remains positive.

Research, Analytics and Solutions #

• This segment showed mixed performance.

Crisil Intelligence (formerly Market Intelligence & Analytics) #

• Showed momentum, particularly in consulting, DRHP offerings, and risk solutions.
• Credit+ ICON maintained market leadership.
• Integration of GenAI capabilities.
• Outlook strong for infrastructure and data-driven solutions.

Crisil Integral IQ (formerly Global Research & Risk Solutions) #

• Performance impacted by curtailed discretionary spending and cost-cutting pressures from financial services clients.
• Buy-side offerings showed traction.
• Credit risk & lending solutions saw progress leveraging AI/GenAI for credit assessment.
• Regulatory reporting, compliance, and model validation remained areas of strength.

Crisil Coalition Greenwich (formerly Global Benchmarking Analytics) #

• Benefitted from momentum in Corporate & Investment Banking (CIB) and large commercial banks.
• Commercial/Community banking growth supported by digital programs.
• Investments continue to meet demand from private credit and regional banks.

Strategic Initiatives & Outlook #

• Brand Transformation: Undertook a strategic brand refresh.
• Technology Foundation: Significant investment in technology.
  • Launch of GenAI Credit Assessment solution.
  • Development of proprietary platforms/accelerators.
  • Employee training in GenAI.
• S&P Global Collaboration: Leveraging the relationship for global insights, governance best practices, brand referrals, and commercial opportunities.
• Market Outlook:
  • Expect continued bond market growth (rate cuts) and range-bound bank credit growth.
  • Strong outlook for infrastructure (physical/digital) consulting.
  • Increasing focus on AI/ML-backed credit assessment/monitoring.
• Human Resources: Focus on talent acquisition, upskilling, leadership development, succession planning, and fostering inclusion.
• Sustainability/ESG: Integrated into strategy.

Risk Analysis #

1. Cybersecurity & Data Breach: Mitigated by strengthened frameworks, advanced tools, ISO 27001/SOC 2 compliance, continuous monitoring, incident response plans, and employee/vendor training/simulations.
2. Macroeconomic & Geopolitical: Addressed by revenue diversification, agility in sales/delivery, monitoring global developments, and broadening client base to reduce concentration risk.
3. Potential Disruption due to GenAI: Managed by active investment in AI adoption, a dedicated task force evaluating integration, balancing automation with IP protection, aiming to enhance efficiency and unlock growth.
4. Competitive Intensity: Countered by emphasizing differentiated value, strengthening key client relationships, targeting new segments/geographies, and investing in talent/technology.
5. People Risk: Mitigated via robust hiring, leadership development, upskilling, competitive compensation, career pathways, recognition programs, DEI initiatives, and wellness programs.
6. Legal, Regulatory & Policy: Handled through a robust compliance framework, dedicated Legal/Compliance teams, proactive regulator engagement, employee training, and tax compliance controls.
7. Foreign Exchange Risk: Managed via a structured forex program using forward contracts and hedging instruments.

Financial Analysis Report: Crisil Limited - Year Ended December 31, 2024 #

Auditor’s Opinion and Qualifications #

The Independent Auditor, Walker Chandiok & Co LLP, issued an unqualified opinion on both the standalone and consolidated financial statements for the year ended December 31, 2024. The statements are reported to give a true and fair view in conformity with Indian Accounting Standards (Ind AS) and the Companies Act, 2013. The opinion on consolidated statements is based partly on the reports of other auditors for certain subsidiaries and branches. No qualifications or adverse remarks were noted in the main audit report or the Secretarial Audit Report.

Key Accounting Policies #

The financial statements are prepared under the historical cost convention on an accrual basis, conforming to Ind AS notified under the Companies Act, 2013. Key accounting policies consistently applied include:

• Revenue Recognition (Ind AS 115): Complexities noted, particularly for initial rating fees (portion deferred for surveillance), subscription services (time proportion), and project-based services like infrastructure consulting (percentage completion method based on costs incurred). Revenue recognition was identified as a Key Audit Matter due to significant judgments involved.
• Leases (Ind AS 116): Right-of-use assets and corresponding liabilities are recognized, with specific criteria for lease term determination and exclusions for short-term/low-value leases.
• Financial Instruments (Ind AS 109): Classification based on business models (amortised cost, FVTOCI, FVTPL). Impairment is assessed using the Expected Credit Loss (ECL) model, with a simplified approach for trade receivables. Derivatives are used for hedging foreign exchange risk, primarily using cash flow hedges.
• Business Combinations (Ind AS 103): Accounted for using the acquisition method; goodwill measured as consideration less net identifiable assets acquired at fair value.
• Impairment: Goodwill tested annually; other non-financial assets tested upon indication; financial assets assessed via ECL model.
• Share-Based Payments (Ind AS 102): Fair value expensed over the vesting period.

No significant changes in accounting policies were reported for the year ended December 31, 2024, beyond consistent application of existing Ind AS.

Internal Control Effectiveness #

The Auditors issued an unqualified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls with reference to financial statements as of December 31, 2024. Management confirmed the existence of adequate internal financial controls and processes, supported by a multi-layered compliance monitoring framework involving business functions, compliance tools, internal audits, and Board/Committee reviews.

Regulatory Compliance Status #

The Secretarial Audit Report confirmed compliance with major applicable statutes including the Companies Act, 2013, SCRA, 1956, Depositories Act, 1996, FEMA, 1999 (for FDI/ODI), and relevant SEBI regulations (Insider Trading, Share-Based Benefits, Research Analysts, LODR, etc.). Directors’ Responsibility Statement affirms the existence of adequate systems for compliance. Two minor penalties were disclosed: ₹1.46 lakh related to GST input tax credit reversal (appealed) and ₹0.06 lakh related to Connecticut withholding taxes (response being filed). No material non-compliance or significant penalties impacting operations were reported.

Legal Proceedings and Potential Impact #

Contingent liabilities primarily relate to disputed tax demands (Income Tax, Service Tax, GST) aggregating approximately ₹65.3 crore (Consolidated) and ₹60.5 crore (Standalone) as of December 31, 2024. The Company has contested these demands. No significant or material orders from regulators/courts impacting the going concern status or future operations were reported.

Related Party Transactions #

Significant related party transactions occur primarily with the ultimate holding company group (S&P Global Inc. and its subsidiaries) and Crisil’s own subsidiaries. Key transactions involve providing/receiving professional, analytical, and support services, reimbursements, and dividend payments. Transactions are stated to be conducted in the ordinary course of business and on an arm’s length basis, pre-approved by the Audit Committee. Shareholder approval (excluding S&P Global) was obtained for transactions with S&P entities. Details are disclosed in Notes 39 (Consolidated) & 40 (Standalone) and Annexure AOC-2.

Subsequent Events #

• Dividend: The Board proposed a final dividend of ₹26 per share for FY2024, subject to shareholder approval at the AGM on April 30, 2025.
• Mergers: Processes for the merger of wholly-owned subsidiary Bridge To India Energy Private Limited with Crisil Limited (NCLT application filed Nov 2024) and the business transfer from Peter Lee Associates Pty Limited to Crisil Irevna Australia Pty Ltd (closed Dec 2024) are ongoing or recently concluded parts of entity streamlining.

Analysis of Accounting Quality #

Accounting quality appears reasonable, supported by unqualified audit opinions and adherence to Ind AS. The consistent application of policies enhances reliability. However, the identification of Revenue Recognition as a Key Audit Matter underscores the significant judgments and estimates involved, particularly concerning performance obligation satisfaction and cost estimation for percentage-of-completion contracts. This area requires careful management oversight and represents a potential source of estimation uncertainty. Disclosures regarding critical estimates (impairment, leases, defined benefits, taxes) seem adequate.

Regulatory Risk Assessment #

Crisil operates in highly regulated sectors (credit ratings, financial research, ESG ratings) across multiple jurisdictions (India, US, UK, Europe, APAC), exposing it to significant regulatory risk. Key areas include compliance with SEBI regulations (CRA, Research Analyst, ESG Ratings Provider, LODR), international financial regulations, data privacy laws (GDPR, CCPA etc.), and cybersecurity mandates. The establishment of robust compliance frameworks, dedicated compliance functions, and regular audits (Statutory, Secretarial, Internal) act as mitigants. Cybersecurity and data privacy are highlighted as key operational and regulatory risks requiring continuous investment and vigilance. Minor tax disputes indicate ongoing engagement with fiscal authorities. Overall regulatory risk is assessed as moderate but inherent to the business model, requiring proactive management.