CreditAccess Grameen Ltd. share price target

Strong franchise aligned to its revised upwards guidance

Recommendation: We maintain our BUY recommendation on the stock.

We maintain our BUY recommendation on the stock.

CA Grameen continued to deliver strong operating performance in Q2FY24 as reflected in RoA sustaining at >5% and RoE at 25% for three consecutive quarters. Profitability was largely driven by steady AUM growth, efficient liability management (CoF increased by only 30bps since Sep’21) and controlled asset quality.

We maintain our BUY recommendation on the stock.

In a seasonally weak quarter, CA Grameen reported strong earnings beat – PAT was up 17% QoQ at INR 3.4bn (I-Sec: INR 3bn), supported by strong topline growth of 9% QoQ and credit cost moderating to normalised level of 40bps (non-annualised). The beat poses an upside risk to FY24 guidance, especially on NIM (guidance at 12-12.2% vs 13% in Q1FY24) and cost-to-income ratio (guidance at 35-36% vs 31% in Q1FY24).

A cracking start to FY24