Buy CreditAccess Grameen; target of Rs 1960: KR Choksey

KR Choksey is bullish on CreditAccess Grameen has recommended buy rating on the stock with a target price of Rs 1960 in its research report dated January 29, 2024.

Broker Research

January 31, 2024 / 09:34 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

KR Choksey's research report on CreditAccess Grameen

Net Interest Income (NII) for Q3FY24 increased by 41.6% YoY (+3.9% QoQ) to INR 8,024 Mn. NII was in line with our estimates (-0.2% deviation). NIMs stood at 13.1% in Q3FY24, an improvement of 120 bps YoY, while flat on a sequential basis. For the 9MFY24, NII grew by 51.2% YoY to INR 23,377 Mn. • The Pre-Provisioning Operating Profits (PPOP) grew by 58.6% YoY and 7.0% QoQ to INR 6,018 Mn in Q3FY24, led by growth in NII and healthy YoY growth in noninterest income. PPOP was 6.0% higher than our estimates owing to higher non-interest income due to higher bad debt recoveries. For the 9MFY24, PPOP grew by 70.2% YoY to INR 10,035 Mn. • The NBFC registered a net profit of INR 3,533 Mn in Q3FY24 which represents a growth of 63.8% YoY (+1.8% QoQ). Healthy operating performance led to robust YoY growth, resulting in a net profit deviation of 1.1% higher than our estimates. • The Capital Adequacy Ratio (CAR) as of December 31, 2023, stands at 24.5%, with the Tier-1 ratio at 23.6%. The annualized Return on Assets (RoA) for Q3FY24 stood at 5.5%. The annualized Return on Equity (ROE) stood at 23.6% for the quarter

Outlook

Since our last update, the stock has appreciated by 8.9% and is currently trading at P/ABV multiples of 4.1x/3.2x/2.5x based on FY24E/25E/26E ABVPS. We have introduced FY26E estimates and accordingly rolled over our valuation on FY26E from FY25E. We assign P/ABV multiple 3.0x to FY26E ABVPS of INR 654.1 per share and revise our target price upwards to INR 1,960/share (Previous target: INR 1,765) with an upside of 17.6% over the CMP. Accordingly, we maintain our “BUY” rating on CreditAccess Grameen Ltd.

For all recommendations report, click here