CARE Ratings Ltd · NSE:CARERATING
CARE Ratings — Q1 FY2020 Earnings Presentation
20 slides from CARE Ratings's earnings presentation, August 2019
Slide 1: CARE Ratings Limited Investor Presentation – Q1FY20
CARE Ratings Limited Investor Presentation – Q1FY20
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT 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 SU
Slide 3: CARE Ratings Group
CARE Ratings Group CARE Ratings Limited CARE Risk CARE Advisory CARE Ratings CARE Ratings Solutions Research and (Africa) (Nepal) Private Training Private Limited, 51% Limited,100% Limited, 100% Limited, 78% Investors Presentation Q1 FY20 3
Slide 4: Diversified Business Mix
Diversified Business Mix Ratings Information Analysis & Grading Manufacturing & Services sector Industry & Customized Research reports Financial sector CARE Industry Risk Metrics (CIRM) reports Infrastructure Grading services Small & Medium Enterprises Training Structured Finance
Slide 5: Experienced & Professional Management
Experienced & Professional Management T N Arun Kumar– Interim CEO 27 years of experience in financial services Before joining CARE, worked for The Industrial Finance Corpn. of India Ltd. Holds Bachelor’s degree in Technology (Agricultural Engineering) from IIT – Kharagpur PGDM from IIM ‐ Ahm
Slide 6: Experienced & Professional Management
Experienced & Professional Management Milind Gadkari Swati Agarwal Jain Revati Kasture Sanjay Kumar Agarwal Amod Khanorkar Senior Director, Senior Director, Senior Director, Senior Director, Senior Director, Ratings Ratings Ratings Ratings Business Development 17 years of experience in 22 years
Slide 7: Shareholding Snapshot as on June 30, 2019
Shareholding Snapshot as on June 30, 2019 100% Public Shareholding‐ Professionally Managed Names of Top 20 Shareholders Holding % LIFE INSURANCE CORPORATION OF INDIA+ LIC P & GS FUND 9.85 CRISIL LIMITED 8.90 0.01% 0.20% FRANKLIN TEMPLETON INVESTMENT FUNDS + Mutual fund 8.13 10.45% PSU/Govt STICHTING
Slide 8: Financial Performance
Financial Performance Rs. Lakhs Standalone Consolidated % Change % Change Particulars Q1FY20 Q1FY19 Q1FY20 Q1FY19 Revenue from Operations 4,522 5,742 ‐21.2% 4,992 5,999 ‐16.8% Total Expenses 3,568 2,950 21.0% 3,989 3,265 22.2% Operating Profit 954 2,792 ‐65.8% 1,003 2,734 ‐63.3% Other Income 774 424
Slide 9: Financial Performance: Q1 FY20
Financial Performance: Q1 FY20 Q1 FY20 Operating profit margin falling due Operating Profit Margin (%) prolonged period of headwinds faced by the NBFC 60% 48.62% sector since the end of the second quarter of FY19 & 40% its impact on the borrowings by this segment. Capex 21.10% related borrowings of
Slide 10: Business Performance: Q1 FY20
Business Performance: Q1 FY20 4.50 2,000 1,806 4.00 Volume of Debt Rated (Rs lk cr) 3.81 3.90 1,800 No of Instruments Rated 1,569 3.50 1,600 3.00 1,400 1,223 1,200 2.50 916 1.91 1,000 2.00 1.45 800 1.50 1.31 1.17 1.06 600 1.00 0.82 400 156 212 0.50 200 27 22 54 73 0.00 ‐ Short & Medium Long term Ban
Slide 11: Rating Movement
Rating Movement There has been a deterioration in the credit quality of entities rated by CARE Ratings in the first quarter of the ongoing financial year which attests to the prevailing slowdown in the domestic economy. The credit quality as measured by CARE Ratings ‘modified credit ratio’ (MCR), fo
Slide 12: CARE Ratings Debt Quality Index (CDQI)
CARE Ratings Debt Quality Index (CDQI) CDQI showed an improving trend during the first five months of FY19. However, it fell marginally in the months of September and October’18 and remained more or less stable in the months of November’18 –February’2019. It, thereafter, increased during Mar‐ Apr’19
Slide 13: Economic Backdrop
Economic Backdrop 4.2 IIP Growth GDP growth (%) 4.1 9 4.1 8.0 8.2 8 7.4 7.2 6.8 4.0 7 6 3.9 5 % % 3.8 4 3.7 3 3.7 2 3.6 1 0 3.5 FY15 FY16 FY17 FY18 FY19 FY19 (Apr‐May) FY20 (Apr‐May) Investors Presentation Q1 FY20 13
Slide 14: Economic Backdrop: Inflation and Rupee
Economic Backdrop 6.0 5.5 Inflation Rs/$ 5.2 Aug‐18 Dec‐18 Feb‐19 Apr‐18 Apr‐19 Oct‐18 Jun‐18 Jun‐19 5.0 4.6 3.8 60.00 4.0 3.2 3.2 3.1 3.2 62.00 3.8 2.8 2.9 % 3.0 3.4 64.00 2.9 3.0 2.6 2.5 66.00 2.0 2.3 2.2 2.0 2.0 68.00 1.0 69.43 70.00 69.77 0.0 72.00 Apr‐19 Sep‐18 Feb‐19 May‐19 Oct‐18 Nov‐18 Dec‐1
Slide 15: Economic Backdrop
Economic Backdrop Growth in Bank credit 0.0 ‐0.2 ‐0.1 ‐0.4 ‐0.6 % ‐0.8 ‐1.0 ‐1.2 ‐1.4 ‐1.3 Q1 FY19 Q1 FY20 Investors Presentation Q1 FY20
Slide 16: Economic Backdrop: Credit Growth and CP Issuances
Economic Backdrop 2.0 Growth in Credit CP Issuances 0.9 1.0 0.5 7.0 ‐0.3 6.24 0.0 5.63 6.0 ‐1.0 ‐0.2 4.92 5.04 5.0 % ‐2.0 Rs. Lkah crore ‐2.0 ‐3.0 ‐2.5 4.0 ‐2.8 ‐4.0 3.0 ‐5.0 ‐5.3 2.0 ‐6.0 Agriculture Industry Services Retail 1.0 0.0 Oustanding CPs Issuances FY19 (Apr‐May) FY20 (Apr‐May) Q1 FY19 Q1
Slide 17: Economic Backdrop: Corporate Debt Raised
Economic Backdrop Corporate Debt Raised 180,000 160,000 166,804 162,713 140,000 120,000 116,091 Rs. Cr. 100,000 100,672 80,000 60,000 40,000 15,419 4,091 20,000 ‐ Public Issue Private Placement Total Q1 FY19 Q1 FY20 Investors Presentation Q1 FY20 17
Slide 18: Economic Backdrop: Repo Rate, MCLR and G Sec Yield
Economic Backdrop 12.00 Repo Rate (%) & MCLR(%) 8.50 G Sec Yield 11.00 10.00 8.00 9.00 8.28 7.50 % 8.00 7.30 % 7.00 6.93 7.00 5.75 6.00 5.00 6.50 4.00 Apr‐18 Apr‐19 Feb‐19 Oct‐18 Jun‐18 Aug‐18 Dec‐18 Jun‐19 6.00 Apr‐18 Apr‐19 Feb‐19 Oct‐18 Jun‐18 Aug‐18 Dec‐18 Jun‐19 Repo Rate (%) MCLR (%) Investors
Slide 19: Economic Outlook for FY20
Economic Outlook for FY20 • GDP growth is expected to be 7.1% in FY20 • Inflation expected to be around 4‐4.5% in FY20 contingent upon global crude oil prices • Exchange rate of Rupee to depreciate by 3% during the year assuming crude oil prices to remain in range of $ 65/barrel • RBI could lower th
Slide 20: Thank You
Thank You Investors Presentation Q1 FY20 20