Conference Call with CreditAccess Grameen Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Finance company CreditAccess Grameen announced Q2FY25 results Financial Highlights: Total income increased by 16.5% YoY from Rs 1,247.6 crore to Rs 1,453.9 crore. Net interest income (NII) increased by 20.8% YoY from Rs 772.0 crore to Rs 932.4 crore. Pre-provision operating profit (PPOP) increased by 19.5% YoY from Rs 562.6 crore to Rs 672.1 crore. Impairment of financial instruments increased by 338.3% YoY from Rs 95.9 crore to Rs 420.1 crore o Total ECL provisions were Rs 868.7 crore (3.53%) against GNPA (GL: 60+ dpd, RF: 90+ dpd) of 2.44%, and PAR 90+ of 1.74%. NNPA stood at 0.76% and write-offs were Rs 135.0 crore. Profit After Tax (PAT) decreased by 46.4% YoY from Rs 347.0 crore to Rs 186.1 crore. Robust liquidity of Rs 2,035.7 crore of cash, cash equivalents, and investments, 7.6% of the total assets which has been further enhanced to ~10% in October 2024. Healthy capital position with a CRAR of 26.1%. Credit Rating: AA-/Stable by CRISIL, ICRA & India Ratings. Business Highlights: GLP grew by 11.8% YoY from Rs 22,488 crore to Rs 25,133 crore. Borrower base grew by 7.2% YoY from 46.03 lakh to 49.33 lakh across 2,031 branches. Collection Efficiency of 96.3% (excl. arrears). Udaya Kumar Hebbar, Managing Director of CreditAccess Grameen, said: "We have observed a moderate growth during the Q2FY25, which has historically been a sluggish quarter. Given the short-term nature of microfinance loans and timely calibration by industry, we believe the credit cycle to be transient in nature. In the light of the current industry landscape, we have revised our estimates for FY25 annual performance guidance, anticipating loan portfolio growth of 8-12%, NIM of 12.8-13.0%, credit cost of 4.5-5.0%, ROA of 3.0-3.5% and ROE of 12.0-14.0%. We remain confident of our medium-term growth outlook, aiming to reach Rs 50,000 crore mark by FY28 as guided earlier through a combination of both Microfinance and Retail Finance businesses, while upholding our commitment to maintaining best-in-class asset quality.” Ganesh Narayanan, Chief Executive Officer of CreditAccess Grameen, said: “Our conservative provisioning policy has historically enabled early identification of stress, ensuring adequate coverage while pursuing growth opportunities. When comparing with NBFC industry provisioning policy, we are holding additional Rs 102 crore on account of our early recognition and higher provisioning rates. This will help us to recognize 70-75% of the current asset quality stress in FY25 instead of deferring it to the next financial year. Our sustainable business model is exemplified by our strong business performance, achieving a PAT of Rs 584 crore, while delivering an ROA of 4.1% and ROE of 17.1% for H1FY25.” Result PDF