Geojit has given Buy recommendation for CreditAccess Grameen with a target price of Rs. 775 in its research report issued on Aug 25, 2021

Geojit’s research report on CreditAccess Grameen

CreditAccess Grameen Limited (CAGL) is one of the leading Microfinance NBFCs in India with high focus on Group lending and Retail finance with majority of its operations in South India. Gross Loan Portfolio (GLP) declined 7% on sequential basis to Rs.12,664cr as disbursement took a hit during the quarter due to lockdown and restrictions. Disbursement for the quarter de-grew by 77% QoQ while it reached pre-covid levels during July. Though collections were impacted due to lockdown in key cities, improvement was visible during July giving hopes of better asset quality in the coming quarters. Interest income declined by 7.3% YoY and 9.8% QoQ while Net Profit declined by 68.8% YoY and 70.7% sequentially due to collective impact of interest reversal, higher opex and elevated provision.

Outlook

We maintain our Buy rating with a revised upward target price of Rs.775 based on 2.5x FY23E Adj. BVPS.

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