CreditAccess Grameen - Value Emerging; Upgrade To Buy: HDFC Securities

HDFC Securities Institutional Equities

CreditAccess Grameen Ltd.’s Q4 FY24 earnings were ahead of estimates, driven by steady net interest margins (13.1%) and healthy loan growth (+27% YoY), partly offset by higher credit costs (240 basis points).

Profitability (return on asset/return on equity of 5.7%/25%) remained strong on the back of healthy risk-adjusted NIMs and continued efficiency gains. Borrower addition continued to gain traction (+15.3% YoY) and is likely to drive loan growth during FY25-FY26E.

CreditAccess Grameen's conservative underwriting and a calibrated approach to building scale have translated into strong cross-cycle profitability and growth outcomes.

The recent stock price correction since our Jan-24 downgrade, along with a steady FY25/FY26 outlook, makes risk-reward attractive.

We upgrade CreditAccess Grameen to Buy from Add with a revised RI-based target price of Rs 1,920 (implying 3.1 times Mar-26 adjusted book value per share).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.