Ramnath Krishnan: ICRA analytics business continues to be one of the strong pillars for growth and diversification
FinTech BizNews Service
Mumbai, 21 October, 2023: ICRA Limited has announced its results for the second quarter and half year ended September 30, 2023, on October 20, 2023. Consolidated revenue from operations increased by 6.4% to Rs. 104.9 crore for the second quarter ended September 2023, compared to Rs98.6 crore in the corresponding quarter of the previous year. PBT was up by 2.8% to Rs47.3 crore from Rs46.0 crore in the corresponding quarter of the previous year. Consolidated revenue from operations increased by 8.6% to Rs207.6 crore for the half year ended September 2023, compared to Rs191.1 crore in the corresponding previous year. PBT for the half year ended September 2023 increased by 17.6% to Rs97.0 crore from Rs82.5 crore in the corresponding previous year.
The Indian economic activity displayed mixed trends in Q2 FY2024. An erratic monsoon raised concerns regarding the outlook for agriculture and rural demand. While there was an improvement in urban consumer confidence levels, with continuing demand for contact-intensive services, the demand for goods was mixed, as were the trends in private sector investment activity. There was an encouraging frontloading in capex by the Government of India (GoI) and the states, although we remain circumspect that the momentum could slow as we approach general elections. Further, external headwinds and resurgence of geopolitical tensions pose risks, including for commodity prices. ICRA continues to project the FY2024 GDP growth at 6.0%, with the pace of growth expected to moderate in Q2-Q4 FY2024, from the levels recorded in Q1 FY2024.
Commenting on the results, Ramnath Krishnan, MD and Group CEO, ICRA Limited, said: "ICRA ratings revenue continued to grow despite headwinds in the bond market and the bank credit market. ICRA analytics business continues to be one of the strong pillars for growth and diversification as we continue to invest in critical partnerships and infrastructure to accelerate growth. We continue to stay focused on enhancing our technology footprint to better serve our clients and drive growth."
ICRA Analytics Ltd, a wholly owned subsidiary of ICRA Ltd, has entered into a definitive agreement to acquire majority stake in D2K Technologies India Pvt Ltd (D2K). D2K is an established provider of software solutions to banks and other financial institutions in India. Backed by deep domain expertise, D2K helps financial institutions meet regulatory compliances, enhance their business processes, improve customer acquisition and retention, and build robust analytical platforms. The proposed acquisition is subject to closure of customary conditions.
During Q2 FY2024, the company not only expanded its research activities but also organised a notable market event in New Delhi focused on electric vehicles and renewable energy. The event featured Shri Raj Kumar Singh, Power Minister, as the keynote speaker and attracted a diverse audience comprising industry delegates, high-ranking Government officials, policy influencers, thought leaders, and representatives from financial institutions.
ICRA collaborated with NGO partners to run education, women’s empowerment, and skill development programmes. As a part of these initiatives, ICRA provided holistic education to under privileged children with learning disabilities, through digital empowerment programmes.
Ratings revenue growth
Ratings revenue growth for the quarter is up by 7.8%; Half-year up by 11.8%. In Q2 FY2024, both the bond market and the bank credit market faced headwinds due to volatile yields and tight liquidity respectively. Bond issuances saw a dip from both Bank and NBFC segments. Bank credit growth also experienced a downtrend in the industrial and services segments. Securitization market continue its growth trajectory and saw a strong pickup in Q2 FY2024 as NBFCs funded their growing book through diversified avenues given the tight liquidity conditions. Going ahead, while credit and liquidity conditions may remain tight, higher global interest rates would keep domestic credit relatively more economical.
Analytics revenue growth
Analytics revenue growth for the quarter is up by 4.5%; Half-year up by 4.4%. ICRA Analytics saw modest growth in knowledge services whereas banking and risk segment performance was muted. ICRA Analytics entered into key partnership arrangements with leading global data service providers for value added services.
In the current year, ICRA Limited and ICRA Analytics Limited entered into an agreement for share of common expenses. Consequently, ICRA Ratings half-year segmental margins include 2.0% positive impact of such recharge, whereas ICRA Analytics segmental margins had an adverse impact of 2.7%.
