Are CRISIL latest results good or bad?

CRISIL's latest financial results for the quarter ending September 2025 reflect a solid operational performance, characterized by consistent revenue growth and improving profitability metrics. The company reported net sales of ₹911.24 crores, marking a year-on-year growth of 12.24%, which is an improvement from the previous year's growth rate of 10.32%. This growth was supported by strong demand across its ratings and research segments, indicating the company's sustained market leadership.
Net profit for the same period reached ₹193.10 crores, with a year-on-year growth of 12.56%. This growth rate is slightly lower than the previous year's 12.87%, suggesting a moderation in profit growth. However, the operating profit margin (excluding other income) improved to 28.89%, reflecting effective cost management and operational leverage, as it increased from 27.57% in the prior year.

The company's return on equity (ROE) stood at 28.37%, demonstrating strong capital efficiency, which is significantly above the typical threshold for quality businesses. Additionally, CRISIL maintained a zero-debt balance sheet, with a net cash position of ₹1,369 crores, providing financial flexibility for future investments or shareholder returns.

Despite these positive operational trends, CRISIL's stock is facing challenges related to valuation concerns, as it trades at a high P/E ratio compared to historical averages and peer group multiples. This has led to an adjustment in its evaluation, reflecting the market's cautious stance regarding the stock's premium pricing amid moderating growth expectations.

Overall, CRISIL's financial results indicate a company that continues to perform well operationally, yet faces scrutiny regarding its valuation and market performance, highlighting the complexities of investing in high-quality businesses at elevated price levels.