CreditAccess Grameen Ltd. share price target

We maintain our BUY recommendation on the stock and value CA Grameen at 3.2x FY24E BV to arrive at a target price of Rs 1,200/share, implying an upside of 22% from the CMP.

E Q2FY23 was a quarter in which all operating parameters of CreditAccess Grameen (CAGL) were back to pre-covid levels.

Guidance maintained despite weak quarter; Retain BUY'

CA Grameen’s FY22 annual report provides detailed insights on how the company has ‘Stood the Test of Time and Trust’. Despite repetitive covid waves, it delivered >2% RoA and >9% RoE. Superior management execution also reflects in it completing the integration process of Madura Micro Finance Limited (MMFL) in Sep21 and by March’22, ~65% of MMFL’s AUM was serviced as per CA Grameen’s operating model.

Asset quality issues behind; Growth Ahead

We recommend a BUY rating on the stock with a target price of Rs 831/share, implying an upside of 10% from the CMP.

CreditAccess Grameen Limited (CAGL) is one of the leading Microfinance NBFCs in India with high focus on Group lending and Retail finance with majority of its operations in South India. Gross Loan Portfolio (GLP) grew by 18.4% YoY and 9.4% QoQ as disbursement registered a strong growth during the quarter Disbursement for the quarter grew by 21.3% QoQ with CA Grameen growing at 13.3% and MMFL growing at 78.8%. Collection efficiency of CA Grameen improved to 94.5% whereas...