ICICI Securities has given Buy recommendation for CreditAccess Grameen recommended buy rating on the stock with a target price of Rs 1200 in its resear with a target price of Rs. 1200 in its research report issued on Apr 01, 2022

ICICI Securities research report on CreditAccess Grameen

CA Grameen’s (CAGL) journey from the status of a project under the T. Muniswamappa Trust, an NGO in South Bangalore, in 1999, to the largest NBFC-MFI in India as of Dec’21, with consolidated AUM of Rs146bn and borrower base of ~3.7mn, reflects its agility and resilience across business cycles. But its journey from ~Rs150bn to ~Rs300bn AUM over the next 3 years would be critical, given no historical precedence of any standalone NBFC-MFI delivering >20% AUM growth and >4% RoA on such scale. However, we believe the harmonised MFI regulation (refer our note: Link) would strengthen market position of NBFC-MFI players. Taking cognisance of expanded addressable market for NBFC-MFIs, the directive to adopt risk-based pricing and CAGL’s competitive loan pricing (lowest amongst NBFC-MFIs at 19.15%), healthy capital positioning (CAR at 25%), we believe the company would be the biggest beneficiary of revised MFI regulation.


Maintain BUY with a revised target price of Rs1,200 (earlier: Rs900), valuing the stock at 4x FY23E BVPS vs 2.5x earlier. We raise the multiple on the back of structural high-growth opportunity and improving visibility on achieving ~20% RoE by FY24E/FY25E. Our target multiple is still >10% lower than the historical peak multiple.

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At 14:01 hrs CreditAccess Grameen was quoting at Rs 881.80, up Rs 32.75, or 3.86 percent.

It has touched an intraday high of Rs 891.65 and an intraday low of Rs 847.00.

It was trading with volumes of 9,748 shares, compared to its thirty day average of 14,433 shares, a decrease of -32.46 percent.

In the previous trading session, the share closed down 1.06 percent or Rs 9.10 at Rs 849.05.

The share touched its 52-week high Rs 873.60 and 52-week low Rs 495.30 on 30 March, 2022 and 01 December, 2021, respectively.

Currently, it is trading 0.94 percent below its 52-week high and 78.03 percent above its 52-week low.

Market capitalisation stands at Rs 13,744.29 crore.

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