KR Choksey's research report on CreditAccess Grameen
Net Interest Income (NII) for Q4FY22 increased by 23.1% YoY to INR 4,613Mn. For the full year FY22, NII stood at 15,833Mn, an increase of 16.3% YoY. The operating profit for Q4FY22 stood at INR 3,688Mn, a growth of 12.1% YoY. For the full year FY22, operating profits saw a 13.2% YoY growth at INR 10,776Mn. The cost to income ratio for Q4FY22 was improved at 33.8% as against 39.3% in Q3FY22. Disbursements improved at INR 57,920Mn (+22.5% YoY / +22.7% QoQ) and it has opened 42 new branches during the quarter. Gross Loan Portfolio (GLP) grew by 22.2% YoY as on Mar’22 at INR 165,990Mn (13.8% QoQ) as against INR 135,870Mn as on 31st March 2021, well ahead of 17-19% guidance growth. It has an active borrower base of 38.2 lakh. Profit after tax for Q4FY22 increased by 108.3% YoY to INR 1,601Mn ahead of our estimates, (INR 769Mn in Q4FY21), while for FY22 the PAT stood at INR 3,518Mn, a growth of 162.3% YoY. Credit costs declined up to 1% in Q4FY22 with INR 1,510Mn provisioning. Gross NPA (GL: 60+ dpd, RF: 90+ dpd) as of Mar’22 stood at 3.61% as against 4.43% as of Mar’21. Capital adequacy ratio (including Tier-II capital) as of 31st March 2022 was 22.8%. The Tier-I capital was 21.8%.
Outlook
Currently, the stock is trading at 3.8x P/ABV based on FY22 ABVPS of INR 246 and our previous target of INR 843/share has been achieved. We are positive on the company’s strong business model and the robust growth is expected in 2HFY23. We assign P/ABV multiple 3.0x to FY24E ABVPS of INR 378 to revised our target price upwards at INR 1,135/share and maintain our BUY recommendation on the stock with an upside of 23% over the CMP.
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