CLSA has upgraded its rating on the stock to “outperform” from its earlier rating of “hold”, and has a target price to ₹1,750 apiece from ₹1,600, which indicates a potential upside of 16.9% from its previous closing price.
The brokerage said that CreditAccess Grameen’s fourth quarter profit after tax (PAT) was in-line with estimates as lower credit costs offset the weak topline.
Its assets under management (AUM) grew 11% sequentially, led by record disbursements. Asset quality improved sharply, with net slippages halving from the previous quarter.
The company’s management has guided for the FY27 credit cost to be between 3% – 4% compared to 6% in the previous fiscal.
CreditAccess Grameen’s net interest income (NII) increased 20% from the previous year, while its net interest margin (NIM) expanded to 14.2%. Its gross non-performing assets (NPA) improved to 3.2% from 4% sequentially and its credit cost moderated to 4.8%.
The management said borrower quality, collections and portfolio at risk (PAR) trends have largely normalised.
For FY27 it has guided for 20% – 25% growth, led by core MFI and retail finance. The management has guided for return on assets to be between 4% – 4.8% and return on equity (RoE) to be between 16% – 20%.
Of the 18 analysts who have coverage on the stock, 17 have a “buy” rating and one has a “sell” rating.
Shares of CreditAccess Grameen are trading little changed at ₹1,498.3., having made an intraday high of ₹1,552 earlier in the day, close to its 52-week high of ₹1,568. The 23% rally seen by the stock in the last one month has led to the stock also turning positive on a year-to-date basis.
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