CRISIL (NSE:CRISIL) Ticks All The Boxes When It Comes To Earnings Growth

Simply Wall St · 06/10 06:04

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like CRISIL (NSE:CRISIL). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide CRISIL with the means to add long-term value to shareholders.

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How Quickly Is CRISIL Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years CRISIL grew its EPS by 12% per year. That's a good rate of growth, if it can be sustained.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. While we note CRISIL achieved similar EBIT margins to last year, revenue grew by a solid 5.5% to ₹33b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

earnings-and-revenue-history
NSEI:CRISIL Earnings and Revenue History June 10th 2025

Check out our latest analysis for CRISIL

Fortunately, we've got access to analyst forecasts of CRISIL's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are CRISIL Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that CRISIL insiders have a significant amount of capital invested in the stock. Holding ₹5.5b worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. That's certainly enough to let shareholders know that management will be very focussed on long term growth.

Should You Add CRISIL To Your Watchlist?

One positive for CRISIL is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. These two factors are a huge highlight for the company which should be a strong contender your watchlists. Another important measure of business quality not discussed here, is return on equity (ROE). Click on this link to see how CRISIL shapes up to industry peers, when it comes to ROE.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of Indian companies which have demonstrated growth backed by significant insider holdings.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.