Rakesh Jhunjhunwala portfolio: Anand Rathi initiates coverage on this stock

Brokerage house Anand Rathi has initiated its coverage on CRISIL, a part of Big Bull's portfolio. It has a 'Buy' rating on the stock with a target price of Rs 4,000 per share.

The stock opened a tad higher at Rs 3,505 against the previous close of Rs 3,450.40 on BSE. With a market capitalisation of more than Rs 24,800 crore, the shares stand higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Shares of rating agency have delivered over 88 per cent return in the last one year and has gained over 23 per cent in the last one month.

Anand Rathi believes that CRISIL will maintain its business growth momentum, driven by its investments in talent and technology, recovery in economic activities, new product offerings and solutions.

It noted that the revenue from the overall research segment grew by 20.3 per cent in FY21, due to picking up in economic activity with increased traction for data, insights and capital market research offerings.

"CRISIL’s revenue grew by 10 per cent CAGR in the last 3 years. With the recovery in economic activity, client additions, new product offerings and solutions - we estimate the momentum will continue and the revenue will grow at 12 per cent CAGR over the next two years," it added.

However, the geopolitical uncertainty, Inflationary pressures, evolving regulatory environment, adverse currency movement, intense competition and reputation risk could act as key risks.

CRISIL reported a profit of Rs 168.63 crore for the quarter ended December 2021 as against a net profit of Rs 110.04 crore in the year-ago quarter. The company's net sales rose 18 per cent to Rs 706.02 crore during the quarter.

According to the shareholding pattern for December 2021, Rakesh Jhunjhunwala holds a 2.89 per cent stake or 21,06,750 shares in the company. Big Bull's wife Rekha Jhunjhunwala holds 2.57 per cent stake or 18,68,250 shares in CRISIL.

In India research business, the company covers 77 sectors and work with nearly 800 Indian and global companies, including 90 per cent of the domestic banking industry by asset base, 20 of the top 25 domestic companies by market capitalisation, all domestic mutual fund and life insurance companies, and four of the world’s leading consulting firms.