>CRISIL: Putting cash to good use - acquires Pipal Research

■ CRISIL to by Pipal Research, for a sum of USD12.75mn. The
acquisition is at 1.6-3.2x EV/ Sales (assuming 50-100%
stake), which is lower than 2.2x it gave for Irevna in 2005

■ Looking at CRISIL’s history of acquiring smaller companies
and then quick scale up it will be able to scale up Pipal’s
business significantly leveraging their existing capabilities

■ The acquisition of Pipal alongwith recent buy back program,
we expect CRISIL’s ROEs to improve, which till date were not
optimized due to high cash on book

■ At CMP of Rs6,169, the stock trades at 26.6x CY10E EPS of
Rs232 and 21.7x CY11E EPS of Rs284. We will review our
numbers and rating after having more details on Pipal

To read the full report: CRISIL