CreditAccess Grameen Q1 Results Review - Muted Loan Growth; Asset Quality Deteriorates Further: Motilal Oswal

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.CreditAccess Grameen Ltd. posted ~14% YoY growth in Q1 FY25 PAT to ~Rs 3.98 billion (inline). Net interest income grew ~29% YoY to ~Rs 9.3 billion and pre-provision operating profit rose 30% YoY to ~Rs 7.1 billion. Cost-to-income ratio was ~29% (previous year: ~31% and previous quarter: ~30%). Reported yields/cost of fund were stable QoQ at ~21%/9.8%. The reported net interest margin contracted ~10 bp QoQ to ~13.0%. Management plans to implement a district-based loan pricing in Q2 FY25 to better align with provisioning rates and protect profitability. We model NIMs of 14.2%/14.1% for FY25/FY26..CreditAccess Grameen’s Q1 FY25 disbursements declined ~6% YoY to ~Rs 44.8 billion due to the calibration of loan growth during elections in the face of a rise in delinquencies. AUM grew ~21% YoY but declined ~2% QoQ to ~Rs 263 billion (previous year: ~Rs 218 billion). The borrower base grew ~13% YoY to ~4.98 million (previous year: ~4.92 million).Gross non-performing asset/net non-performing asset deteriorated ~30 bp/10 bp QoQ to ~1.45%/~0.45%. Provision coverage ratio dipped ~160 bp QoQ to ~69.2%. CreditAccess Grameen attributed higher delinquencies to severe heat waves and operational limitations in collections at the time of elections. Annualized credit costs rose to ~2.6% (previous: ~1.4% and previous quarter: ~2.4%). Last quarter, management raised its credit cost guidance for FY25 in anticipation of higher delinquencies and provisioning requirements in its non-core states..Click on the attachment to read the full report:.CreditAccess Grameen Q1 Results: Net Profit Rises 15% To Rs 398 crore.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

CreditAccess Grameen Q1 Results Review - Muted Loan Growth; Asset Quality Deteriorates Further: Motilal Oswal

Despite the sector staring at near-term headwinds because of the buildup of customer leverage, the brokerage expects CreditAccess to exhibit much higher resilience compared to its peers.

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CreditAccess Grameen Q1 Results Review - Muted Loan Growth; Asset Quality Deteriorates Further: Motilal Oswal

Despite the sector staring at near-term headwinds because of the buildup of customer leverage, the brokerage expects CreditAccess to exhibit much higher resilience compared to its peers.

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