CreditAccess Grameen Ltd. share price target

Improving growth and asset quality outlook

We maintain a BUY rating on the stock with a revised target price of Rs 810/share, implying an upside of 12% from CMP.

We upgrade our rating to Buy with a revised downward target price of Rs 767 based on 2.5x FY23E Adj. BVPS. Strong disbursement aided growth in Gross Loan Portfolio In Q4FY21, total disbursement grew by 42% YoY and 3% QoQ to Rs 4,726cr and resultantly Gross Loan Portfolio (GLP) grew by 13% YoY and 10% QoQ. GLP of standalone entity grew by 15% YoY to Rs 11,341cr while MMFL grew by 7% to Rs 2,246cr. However, number of borrowers saw a reduction of 3.5% YoY to 39.12 lakh. During the quarter, interest income grew 19.2% QoQ while finance...

Robust quarter; Outlook blurred by second covid wave

We initiate coverage on Bandhan Bank (Bandhan) and CreditAccess Grameen (CAG) in the microfinance space with a positive outlook over the long term. The MFI segment has successfully weathered numerous disruptions over the past decade and has exhibited quick revival while emerging stronger.

Gross Loan Portfolio grew to Rs 11,183cr (41.5%YoY) supported by inorganic growth of merger with Madura microfinance. Interest income de-grew by 5.7% QoQ to Rs 567cr whereas PAT grew by 6.6% QoQ driven by lower costs and provisions....

Relief in national and regional lockdowns led to restoration of demand during Q2 but sales were below pre-COVID levels. During the quarter domestic / international...

Acquisition of Madura microfin to drive value 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 operation in South India. The growth of microfinance industry in India is a huge opportunity...

Despite Covid impacting operations in March, AUM growth was solid at 11.5% qoq and 38% yoy. Negligible branch/loan officer addition led to significant reduction in Opex/AUM ratio (from 5.1% in Q3 FY20 to 4.6%). There was a material reduction in funding cost...

CreditAccess Grameen Ltd (CAGL) is the 3rd largest NBFC-MFI in India in terms of gross loan portfolio (as of FY17). The company provides micro-loans to women customers predominantly in the rural areas primarily under the joint liability group (JLG) model, which comprised 87% of loan portfolio as of FY18. CAGL is promoted by CreditAccess Asia N.V, a multinational company specializing in MSE financing. The microfinance company enjoys the lowest operating expense ratios amongst the top-eight NBFC MFIs and SFBs showcasing operational...