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Rakesh Jhunjhunwala-owned Crisil share price jumps post results, more upside predicted; dividend announced

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Rakesh Jhunjhunwala portfolio stock Crisil has soared 10% in the last five trading sessions and was again 1.4% higher on Tuesday morning. The recent up-move charted by the stock comes after the company has posted its January-March quarter earnings, where net profit soared 45.6% and income from operations for the quarter was up 20.1%. The company has also declared a dividend of Rs 7 per share. Currently, shares of Crisil were trading at Rs 3,386 per share. Ace investor Rakesh Jhunjhunwala owns 40 lakh equity shares of Crisil along with his wife Rekha Jhunjhunwala. 

Last week Crisil reported its quarterly results where the company’s net profit came in at Rs 121 crore, up 45.6%, compared to Rs 83.5 crore in the corresponding quarter of the previous year. The company’s consolidated income from operations for the quarter ended March 31, 2022, was up 20.1 % to Rs 594.9 crore. 

Target price revised upward

Analysts see more upside potential for the stock and have increased their target price for the Crisil stock. With a ‘Buy’ rating on the scrip, Edelweiss has upped the target to Rs 3,824 per share. On the other hand, Yes Securities has changed the target price to Rs 4,100 per share from Rs 3,750 apiece. 

Outlook robust

“We raise earnings estimates by 4-5% across CY22-24 by lifting growth and margin assumptions on the back of strong performance delivery in Q1 CY22 and positive management commentary about concurrent trends in market/wallet share in various businesses and readiness/capabilities to tap evolving opportunities,” Yes Securities said in a note. The brokerage firm now estimates 15%-23% consolidated revenue/PBT CAGR over CY21-24 and ~400 bps margin expansion through the period.

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According to Yes Securities, Crisil stock trades at 41x 1-yr rolling fwd. P/E, and its peak valuation has been around 55x in the past seven years. “Multiple is expected to re-rate on prospects of substantial RoE expansion,” they added.

Analysts at Edelweiss said that CRISIL is well placed given its leading position in the corporate bond market and improving credit growth (bank loan ratings). “Despite moderating global growth, the outlook for Research is better owing to traction across risk transformation, benchmarking analytics and India research. This would expand EBIT margin by 150bp-plus per year in the Research segment,” they added. 

Rakesh Jhunjhunwala to get massive dividend

Rakesh Jhunjhunwala owns 21,29,250 equity shares of Crisil or 2.92% stake in the company. Additionally, Rekha Jhunjhunwala owns 18,70,750 equity shares or 2.56% stake. Taking the interim dividend of Rs 7 per equity share in consideration, the Jhunjhunwala will receive a total of Rs 2.8 crore in the form of dividend from their Crisil stake.



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