Geojit's research report on CreditAccess Grameen
CreditAccess Grameen Ltd. (CAGL) is one of the leading microfinance NBFCs in India with a strong focus on group lending and retail finance. The majority of its operations in South India. The Gross Loan Portfolio (GLP) grew by 20.6%YoY, reaching Rs.26,304cr, while the number of active borrowers increased by 12.7%YoY. Advances are expected to grow at a CAGR of 23% during FY25-26, supported by strong customer additions. The Net Interest Income (NII) growth stood at 28.7%YoY. The Net Interest Margin (NIM) contracted by 10bps QoQ and stood at 13%. The GNPA and NNPA rose to 1.46% and 0.45%, respectively, from 1.18% and 0.34% in the previous quarter, due to a temporary increase in delinquencies related to seasonal factors. Despite a soft H1FY25, the management remains confident of achieving its guidance spelled for FY25E, driven by strong growth in H2FY25. We believe CAGL remains well-placed to deliver strong return ratios. Consequently, we maintain our BUY rating with a target price of Rs.1,565, based on a 2.4x FY26E BVPS.
Outlook
We believe CAGL remains well-placed to deliver strong return ratios. Consequently, we maintain our BUY rating with a target price of Rs.1,565, based on a 2.4x FY26E BVPS.
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