KR Choksey's research report on CreditAccess Grameen
Loss reported at INR 79.5 cr (-173.7% yoy/-193.1% qoq); as management has taken stringent measures with overall credit costs at ~2.5% for the quarter. Gross Loan Portfolio reported at INR 123.2 bn (39% yoy, 10% qoq) for Q3FY21 and number of borrowers grew at 39.1 lakh (41% yoy, 1% qoq) as against 38.8 lakh/27.7 lakh as on Sep’20/Dec’19, respectively. Net interest income (NII) reported at INR 3.03 bn (+0.8% yoy/-8.3% qoq) due to lower pricing in the industry while there was a growth in non-interest income by +116.2% yoy/+53.3% qoq to INR 14.7 cr. Total operating income reported at INR 3.2 bn (3.4% yoy/ -6.6% qoq). Pre-provision profit reported at INR 1.7 bn (-15.1% yoy/-13.5% qoq). Operating efficiency impacted due to increased operating expenses. Overall cost to income ratio stood at 46.5% (+1163bps yoy/ +430bps qoq). Proforma GNPA reported at 6.84% for CAGL and 2.79% for MMFL post NPA recognition after 31st Aug’20. As per industry norms (@ 90+ dpd), CAGL’s proforma GNPA would have been at 5.09%. Consolidated proforma GNPA reported at 6.14% as on Q3FY21. Capital Adequacy for CAGL /MMFL reported at 31.4%/23.3% for Q3FY21.
Outlook
Accordingly, we assign P/ABV multiple of ~3.57x to FY22E consolidated adjusted book value of INR 236.2/share to arrive at a target price of INR 843/share and maintain BUY rating on the stock. Currently it is trading at a multiple of 2.7x of consolidated adjusted book value of INR 257/share.
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