The rating agency had an overall weak operational performance for its first quarter ended 31st March 2015 ( year ending 31st Dec). Beginning with lower revenue, its bottomline too was impacted. Consolidated net income from operations was down 6% (QoQ) at Rs.307 crore and operating costs were actually higher vis-à-vis the income earned – it was at 75% in Q1 compared to 71% in Q4. Manpower is its biggest asset as expense – it comprises 65% of the total costs and eats away 49% of its income earned. Net profit for the quarter was down 20% (QoQ) at Rs.56 crore. Even YoY, it was down 19%.

The performance was affected due to lower budgetary support from the Govt for NSIC –Performance & Credit rating scheme for small and medium enterprises. This is National Small Industries Corporation. Although overall issuance volumes in the debt capital markets increased, fresh issuance of bonds and commercial papers from new issuers was subdued. We expect the ratings business to benefit from improvement in the investment climate, pick up in credit growth and decline in interest rates over the coming months. Global investment banks continue to remain under stress; the cost pressures they face will create niche opportunities for GR&A. Increased regulatory requirements will also continue to benefit the GR&A business. The appreciation of the rupee against the GBP and the Euro partly impacted the growth in the global businesses.