The stock of CreditAccess Grameen jumped 4.24 percent to Rs 994.80 in morning trade on April 10 after the country’s largest pure-play microfinance lender reported robust growth in disbursements and customer additions for the fourth quarter of FY23.
Sharing its provisional unaudited numbers for Q4, CreditAccess Grameen said its assets under management (AUM) grew 27 percent YoY to Rs 21,032 crore for the quarter ended March 2023.
Disbursements increased to Rs 7,171 crore from Rs 5,792 crore in Q4 FY22, registering a growth of 24 percent, it said in a regulatory filing post market hours on April 6.
On a sequential basis, disbursements rose 48 percent from Rs 4,847 crore in Q3 FY23.
For the full fiscal 2022-23, disbursements climbed 20 percent to Rs 18,539 crore from Rs 15,466 crore in FY22.
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The number of customers stood at 43.1 lakh in Q4 FY23, as against 38.2 lakh in the corresponding period of the previous fiscal, up 13 percent.
The company’s branch count ticked higher by 9 percent to 1,782 from 1,635 in the year-ago period.
CreditAccess Grameen is a Bengaluru-based microfinance institution (MFI) promoted by Credit Access India BV (CAI), with ~73% stake as of December 2022. It caters to low income households lacking access to formal source of financing.
The company has a major presence in Karnataka (contributes ~35% of book), Maharashtra (~21%) and Tamil Nadu (~21%). These three states together contribute ~77% of its gross loan portfolio (GLP).
India’s microfinance industry clocked a 25.2 percent year-on-year growth in the loan book at the end of the December quarter, data compiled by the microfinance institutions network (MFIN ) shows.
The gross loan portfolio grew to Rs 3.2 lakh crore at the end of December from Rs 2.56 lakh crore in the year-ago period, MFIN said in a statement on March 16.
MFIs are companies that give small loans to low-income borrowers and typically source money from banks to do business. Microlenders faced funding challenges and witnessed a fall in collections during the pandemic period. Collections have picked up since.
Also Read: Microfinance industry loans grew 25% in Q3, MFIN data shows
In a recent report, ICICI Direct assigned a ‘buy’ rating on CreditAccess Grameen with a target price of Rs 1,100. It values the firm at ~2.5x FY25E adjusted book value.
“We expect industry AUM to grow at a healthy pace led by 1) substantial untapped opportunity, 2) favourable regulatory changes, 3) new borrowers’ accretion with geographical expansion and 4) increase in ticket size,” ICICI Direct said, adding the company is well placed to tap these opportunities.
CreditAccess Grameen is also among the top stock picks for April by domestic research firm KRChoksey.
Here are the top stocks ideas by KRChoksey for April 2023
It believes the company will continue to aggressively focus on customer acquisition and benefit from various government initiatives to boost the MFI segment.
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