Buy CreditAccess Grameen; target of Rs 1630: KR Choksey

KR Choksey is bullish on CreditAccess Grameen has recommended buy rating on the stock with a target price of Rs 1630 in its research report dated July 23, 2024.

Broker Research

July 23, 2024 / 14:55 IST

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KR Choksey's research report on CreditAccess Grameen

Net Interest Income (NII) for Q1FY25 increased by 24.8% YoY (+3.3% QoQ) to INR 9,526 Mn. NII was higher by 2.0% than our estimates, led by higher-than-expected interest income. The Pre-Provisioning Operating Profits (PPOP) grew by 30.4% YoY and 3.9% QoQ to INR 7,093 Mn in Q1FY25, led by growth in NII and a robust 119.9% YoY growth in non-interest income. PPOP was 1.3% higher than our estimates. The NBFC registered a net profit of INR 3,977 Mn in Q1FY25, representing a growth of 14.1% YoY (+0.1% QoQ). The net profit was 1.7% lower than our estimates. We have cut our earnings estimates by 5.8% and 9.6% for FY25E and FY26E, respectively. We have revised our P/ABV multiple downward to 2.6x from 2.8x to account for the deceleration in business momentum vs. FY24.

Outlook

We, accordingly, revise our target price to INR 1,630/share with an upside of 28.6% over the CMP and maintain our “BUY” rating.

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