KR Choksey's research report on CreditAccess Grameen
Net Interest Income (NII) for Q4FY23 increased by 32.7% YoY (+21.7% QoQ) at INR 6,898 Mn. NIMs stood at 12.2% in Q4FY23 vs 11.3% in Q4FY22 (an improvement of 90 bps YoY/ 40 bps QoQ). Pre-Provisioning Operating Profits (PPOP) grew by 36.3% YoY and 32.5% QoQ to INR 5,029 Mn in Q4FY23.The cost-to-income ratio for Q4FY23 was 30.2% vs 33.8% in Q4FY22 (36.3% in Q3FY23). The NBFC registered a net profit of INR 2,966 Mn in Q4FY23. This represents a growth of 86.4% YoY (+36.4% QoQ). As of March 31, 2023, the gross loan portfolio grew by 26.7% YoY (+18.2% QoQ) to INR 210.31 Bn. Capital Adequacy Ratio (CAR) as of March 31, 2023, stands at 23.6% with the Tier-1 ratio at 22.7%. The annualized Return on Assets (RoA) for Q4FY23 stood at 5.5%, compared to 3.6% in Q4FY22 vs 4.5% in Q3FY23.
Outlook
Currently, the stock is trading at P/ABV multiples of 3.7x/3.0x/2.4x based on FY23/FY24E/25E ABVPS. We assign P/ABV multiple 2.85x to FY25E ABVPS of INR 478.7 per share and revise our target price upwards to INR 1,365/share (Previous target: INR 1,290) with an upside of 17.1% over the CMP.
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