CreditAccess Grameen up 40% in 3 months as asset quality improves



Shares of CreditAccess Grameen reached a 52-week high at Rs 878 as they rose 15 per cent on the Bahrain Stock Exchange in Friday’s daily trading, in an otherwise range-bound market, on expectations of healthy earnings. The MFI’s stock has surpassed its previous high of Rs 832 touched on March 14, 2022.

At 09:50 am, it was trading 6 per cent higher at Rs 853 on BSE. In comparison, the S&P BSE Sensex was down 0.08 percent at 57548.

Last week, the stock outperformed the market with a 15 percent rise compared to a 1 percent decline in the benchmark. Over the past three months, it’s up 40 percent versus a 1 percent rise in the Sensex.

On Wednesday, March 23, 2022, the company’s Board of Directors approved the proposal to raise up to Rs 1,500 crore in various tranches through the public issuance of Non-Convertible Notes (NCDs) in the local market.

Meanwhile, for the first quarter of October-December (Q3FY22), CreditAccess Grameen consolidated profit after tax (PAT) increased 248 per cent year-on-year to Rs.117 crore on the back of strong operating performance along with improvement. Continuous in asset quality. Consolidated Net Interest Income (NII) grew 35.5 per cent YoY to Rs 412 crore.

The company’s consolidated gross loan portfolio increased by 18.4 per cent year-on-year to Rs. 14,587 crore. CreditAccess Grameen’s consolidated numbers also included the performance of its subsidiary Madura Micro Finance Limited (MMFL).

The pressure on the portfolio continued to normalize, with PAR-0 dropping sharply from its peak of 30.6 percent to 6.8 percent, while GNPA moderated to 6 percent (FY22 Q2: 7.7 percent) for the consolidated entity.

High collection efficiencies (97 percent including arrears), low number of zero-payment borrowers (3.5 percent of assets under management), and adequate savings (GS-III PCR 58 percent) suggest moderate credit costs. It could continue, analysts at HDFC Securities said in a results update report.

“CreditAccess Grameen is increasingly focused on driving portfolio growth (+18.4 percent year-over-year) in the MFI and retail financing portfolio, with approximately 48 percent of new client additions in FY22 9 months outside of the top three states. The company is well positioned well to drive portfolio growth in a risk-adjusted manner, far ahead of its peers, and still our top choice among MFI lenders,” the brokerage said. However, the stock is above its target price of Rs 848 per share.


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