Buy CreditAccess Grameen; target of Rs 1600: Axis Securities

Axis Securities is bullish on CreditAccess Grameen has recommended buy rating on the stock with a target price of Rs 1600 in its research report dated July 24 2023.

Broker Research

July 24, 2023 / 13:34 IST

Buy

26 Aug, 2025 12:21

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Axis Securities report on CreditAccess Grameen

Despite strong performance across metrics in Q1FY24, CAGrameen has retained its earlier guidance of growing GLP in the range of 24%-25%. The company will look to maintain NIMs at 12%-12.2% in FY24. The company’s Cost-Income ratio is expected to remain steady at ~34-35%. Moreover, backed by strong asset quality, its credit costs should range between 1.6%-1.8%, thereby collectively enabling the company to deliver a healthy RoA of 4.7%- 4.9% and RoE of 20%-21% in FY24. However, the management will monitor the performance over the next couple of quarters before revising its guidance for FY24. Taking a cue from Q1FY24 performance, we expect some upwards revision in the management’s guidance across most parameters.

Outlook

Despite the sharp run-up in the stock (+33% in the last 3 months), we believe current valuations of 2.7x FY25E BV reflect the strong performance delivery potential and thus justify premium valuations. We value CAGrameen at 3.2x FY25E BV to arrive at a revised target price of Rs 1,600/share, implying an upside of 22% from the CMP.

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