Conference Call with CreditAccess Grameen Management and Analysts on Q4FY25 & Full Year Performance and Outlook. Listen to the full earnings transcript.
Finance company CreditAccess Grameen announced 9MFY25 & Q3FY25 results Q3FY25 Financial Highlights: Total income increased by 6.7% YoY from Rs 1,295.2 crore to Rs 1,381.9 crore. Net interest income (NII) increased by 7.4% YoY from Rs 802.4 crore to Rs 861.7 crore. Pre-provision operating profit (PPOP) increased by 3.5% YoY from Rs 601.8 crore to Rs 622.9 crore. Impairment of financial instruments was Rs 751.9 crore. Total ECL provisions were Rs 1,244.0 crore (5.07%) against GNPA (largely @ 60+ dpd) of 3.99%, and PAR 90+ of 2.64%. NNPA stood at 1.28% and write-offs were Rs 376.7 crore. While early risk recognition, conservative provisioning & accelerated write-off resulted in a loss of Rs 99.5 crore in Q3 FY25, it will safeguard our profitability over coming quarters with growth rate getting normalised. Robust liquidity of Rs 3,222.2 crore of cash, cash equivalents, and investments, 11.7% of the total assets. Healthy capital position with a CRAR of 25.9%. Credit Rating: AA-/Stable by CRISIL, ICRA & India Ratings. Business Highlights: AUM grew by 6.1% YoY from Rs 23,382 crore to Rs 24,810 crore. Borrower base grew by 2.4% YoY from 46.93 lakh to 48.05 lakh. Branch network grew by 8.7% YoY from 1,894 to 2,059 branches. Collection efficiency of 93.3% (excl. arrears) and 94.1% (incl. arrears). Collection efficiency of X bucket was over 99.2% for Dec-24 and improving trend in Jan-25. 9MFY25 Financial Highlights: Total income increased by 17.1% YoY from Rs 3,713.5 crore to Rs 4,348.4 crore. Pre-provision operating profit (PPOP) grew by 17.3% YoY from Rs 1,708.2 crore to Rs 2,004.4 crore. Profit After Tax was Rs 484.2 crore resulting in ROA of 2.3% and ROE of 9.4%. Udaya Kumar Hebbar, Managing Director of CreditAccess Grameen, said: “The third quarter was encouraging, marked by sustained reversal in new delinquency accretion rate beginning mid-November 2024 and positive business momentum beginning December 2024. This trend of reversing delinquencies, robust customer additions, and sustained AUM growth further improved in January 2025. The collection efficiency in X bucket was over 99.2% in December 2024 and further improved in January 2025. While Q3 FY25 profits were impacted by our early risk recognition, conservative provisioning, and accelerated write-offs, we still delivered ROA of 2.3% and ROE of 9.4% for 9M FY25. We foresee 7-8% loan portfolio growth for FY25 with ROA of 2.3-2.4% and ROE of 9.5-10.0%. We anticipate asset quality to normalise by Q1 FY26 and profitability to normalise by Q2 FY26. Our preliminary outlook for FY26 suggests AUM growth of 18-20% driven by robust customer additions, improved customer retention, and higher share of retail finance. We expect to deliver ROA of 4.2-4.5% and ROE of 17-19% in FY26.” Ganesh Narayanan, Chief Executive Officer of CreditAccess Grameen, said: “The sharp increase in delinquencies since July 2024 was primarily due to implementation of tighter underwriting norms by the industry. We are witnessing significant deleveraging at our borrower level over past five months. Our data shows that in case of borrowers with loans from 4 or more lenders, their AUM share declined from 25.3% in August 2024 to 18.8% in December 2024. Further, more than 84% of borrowers with loans from 4 or more lenders, are promptly repaying, making them eligible for future loans. Hence, we believe that MFIN guardrails will not have any major impact on our customer retention and future growth. Our Retail Finance portfolio, central to our ‘Evolve with Customer’ strategy, has experienced significant growth reflecting robust customer demand and our ability to deliver tailored solutions. The retail finance portfolio currently accounts for 5.0% of AUM amounting to Rs 1,245 crore compared to 2.1% a year ago. Moving forward, all our efforts are focused on strengthening the balance sheet, normalising the asset quality, and positioning the Company for sustained growth in the future.” Result PDF