CreditAccess Grameen - Eminent Leader With Huge Untapped Opportunity: ICICI Direct Initiates Coverage

"BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Direct Report.CreditAccess Grameen Ltd. is a Bengaluru based micro finance institution promoted by Credit Access India BV, with ~73% stake as of December 2022. It caters to low income households lacking access to formal source of financing. Key triggers for future price performance:We expect industry assets under management to grow at a healthy pace led by - substantial untapped opportunity, favorable regulatory changes, new borrowers accretion with geographical expansion and increase in ticket size.Entry in new geography is to aid customer acquisition and improve granularity, while product flexibility to enable better customer retention at 80-90%.Increased threshold of household income is seen aiding both retention of existing customers and improved pace of new client acquisition.CreditAccess’ entry in asset backed loan segment to aid business growth. Share of non-micro book to increase to ~10% in next four to five years. Expect overall AUM to grow at 20-25% compound annual growth rate in FY23-25E.Relatively lower yields (at ~20% versus ~22-25% for peers) and removal of interest cap to improve net interest margins ahead (management guidance at ~12%).Steady opex/asset at ~5% and decline in credit cost to propel earnings trajectory at 52% CAGR in FY22-25E, thereby leading to improvement in return on asset ahead of 4% and return on equity at ~20%, thus aiding premium valuation..Click on the attachment to read the full report:.NCC - Beneficiary Of Capex Upcycle: IDBI Capital Initiates Coverage.DISCLAIMERThis report is authored by an external party. BQ Prime 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 BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner."

CreditAccess Grameen - Eminent Leader With Huge Untapped Opportunity: ICICI Direct Initiates Coverage

Niche player with sustained market leadership and consistent performance across cycles gives confidence on robust business model.

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CreditAccess Grameen - Eminent Leader With Huge Untapped Opportunity: ICICI Direct Initiates Coverage

Niche player with sustained market leadership and consistent performance across cycles gives confidence on robust business model.

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