Initiating Coverage · Credit Ratings, Research & Analytics
CRISIL is India's first and largest credit rating agency, and today it is a good deal more than that. Roughly 70% of its revenue is earned outside India, delivered into the machinery of its 66.6% parent, S&P Global. In the first half of 2026 the company grew revenue 28.8% to ₹2,133 crore and profit 35.7%, its ratings arm compounding above 20% even as bond issuance fell. The market answered by de-rating the shares to about 38 times earnings, close to their cheapest in five years and roughly a quarter below the 52-week high. A growing business, an out-of-favour street, and a price that has quietly returned to reason.
We buy market leaders when the price has fallen back to fair. CRISIL now offers precisely that setup, a franchise growing at a record pace priced as though the record will not last.
The growing business. CRISIL earned record revenue of ₹3,649 crore and record profit of ₹766 crore in calendar 2025, and it accelerated into 2026. First-half revenue rose 28.8% to ₹2,133 crore and profit rose 35.7% to ₹450 crore. Over the past decade revenue has compounded near 10% a year and profit near 11%, and the last five years faster still at roughly 13% on revenue. The ratings arm grew 20.8% in the first half even while the bond market it serves was shrinking.
The below-market price. At about 38 times trailing earnings the shares sit close to the cheapest they have been in five years, against a median nearer 47 times. On enterprise value to sales, the measure that looks through its revenue mix, CRISIL trades at 8.5 times, below the smaller domestic peers ICRA at 9.1 and CARE at 10.1, despite leading both. It is cheap relative to its own history and to the global analytics houses it increasingly resembles, if not to the broad index.
The street the market hates. Bond issuance fell 18% across the first half and 26% in the June quarter, and the whole ratings space de-rated with it. CRISIL itself fell about a quarter from its 52-week high and roughly a third from its 2024 peak. The market extrapolated the issuance drought and looked past the fact that bank-loan volumes and recurring surveillance fees more than replaced the lost bond work.
Mispriced size, not smallness. Screens still file CRISIL under "small cap," yet it is India's number one rating agency and a working part of S&P Global's roughly fourteen-billion-dollar franchise, with 70% of revenue earned abroad. The label describes the market capitalisation, not the durability of the business behind it.
At roughly 38 times trailing earnings, a payout near 57%, and an 11.5% cost of equity, the current price embeds something close to 10% perpetual profit growth. That is almost exactly what CRISIL has compounded for a decade, and well below the low-twenties percent it is printing today. The market is paying for continuation, not for the acceleration the recent numbers describe. The reconvergence of the two is the opportunity.
The discipline is a gate, not a story. Five tests, each a pass or a fail, before a rupee is committed. CRISIL clears three cleanly and two with a caveat we name in full.
Two businesses under one roof. A regulated ratings franchise that prints high-margin annuity fees, and a much larger research and analytics arm that sells data, benchmarking and risk models to the world's financial institutions.
The ratings arm is under a third of revenue but earns more than twice the margin of the analytics book. Blended margins understate the crown jewel rather than describe it.
A decade of steady compounding, with margins that have widened rather than faded as the business scaled. Calendar 2025 set records on every line.
| Year | Revenue | EBITDA | PAT | EPS (₹) | Op. margin |
|---|---|---|---|---|---|
| CY2016 | 1,548 | 443 | 294 | 41.3 | 28.7% |
| CY2017 | 1,658 | 455 | 304 | 42.5 | 27.5% |
| CY2018 | 1,748 | 471 | 363 | 50.4 | 27.0% |
| CY2019 | 1,732 | 456 | 344 | 47.6 | 26.3% |
| CY2020 | 1,982 | 511 | 355 | 48.9 | 25.8% |
| CY2021 | 2,301 | 611 | 466 | 63.9 | 26.5% |
| CY2022 | 2,769 | 730 | 564 | 77.2 | 26.4% |
| CY2023 | 3,140 | 882 | 658 | 90.1 | 28.1% |
| CY2024 | 3,260 | 911 | 684 | 93.6 | 27.9% |
| CY2025 | 3,649 | 1,085 | 766 | 104.8 | 29.7% |
CRISIL reports on a calendar year to December. The first half of 2026, not shown above, lifted revenue a further 28.8% on the prior-year half and profit 35.7%.
Two engines the current multiple treats as mature, when both are early.
The bond market itself. India's corporate bonds outstanding, roughly ₹47 to ₹58 lakh crore today, amount to only about 16% of GDP against 50 to 65% in developed economies. CRISIL's own research and a December 2025 NITI Aayog study project the pool to more than double toward ₹100 to ₹120 lakh crore by FY2030. Every rupee of fresh issuance and every rupee of outstanding debt feeds initial and surveillance fees to the market leader.
The analytics arm. Research, Analytics and Solutions revenue grew 32.4% in the first half of 2026 to ₹1,506.5 crore, with the margin widening to 21.5% from 19.2% a year earlier. The Global Analytics Centre keeps capturing a larger share of S&P's global workload, while the i360 research platform, the Coalition Greenwich benchmarking franchise and the recent PriceMetrix acquisition extend the business into wealth analytics and new geographies. The chart below shows how both segments grew into the current year.
Ratings grew 20.8% and Research, Analytics & Solutions grew 32.4%, even as bond issuance across the same half fell 18%.
On price to earnings CRISIL looks dear beside its two smaller listed peers. On enterprise value to sales, the measure that strips out its lower-margin analytics mix, it trades at a discount to both, while leading them on scale, franchise and global reach.
| Company | P/E | EV/EBITDA | EV/Sales | EBITDA margin | Parent |
|---|---|---|---|---|---|
| CRISIL | ~38× | 28.4× | 8.5× | 29.7% | S&P Global (66.6%) |
| ICRA Ltd | 28.7× | 22.2× | 9.1× | 41.2% | Moody's (51.9%) |
| CARE Ratings | 30.4× | 24.0× | 10.1× | 42.3% | Independent |
CRISIL's lower blended margin reflects its large offshore-analytics book, not weaker economics. The ratings segment alone earned a 47.5% margin in the first half of 2026, ahead of either peer at the group level.
The multiple ran to more than 70 times at the end of 2024 and has since fallen to about 38, below its ten-year year-end median near 43 and further below the five-year daily median near 47.
The franchise is durable. The price is not cheap in absolute terms, so most of the risk sits in the multiple and in the macro that drives issuance.
"CRISIL is the best house on a street the market has stopped visiting. Its revenue and profit stand at record highs, its ratings arm is compounding above 20%, and yet the shares change hands near their cheapest multiple in five years. We are not paying for a miracle. We are paying roughly 38 times earnings for a franchise the price assumes will merely continue, when a decade of evidence says it tends to do rather more."