CreditAccess Grameen Shares Jump 7% After Q4: Brokerages See Further Upside

Shares of CreditAccess Grameen jumped back in the green on Wednesday ending its four straight session losing streak. The stock went up over 7% to hit an intraday high of ₹1,523.40.

What Happened: The non-banking finance company-microfinance institution (NBFC-MFI) reported a 34% year-on-year increase in net profit for the March quarter, reaching ₹397 crore. This growth was attributed to the expansion of its business operations and higher earnings compared to the previous year, where the net profit stood at ₹297 crore.

The company’s gross loan portfolio grew by 27% year-on-year to reach ₹26,714 crore at the end of March 2024. Its gross non-performing assets (NPAs) ratio, fell from 1.21% in the previous year to 1.18%.

The company witnessed an improvement in its net interest margin (NIM) for the quarter, which increased by 91 basis points to 13.1% compared to 12.2% in the corresponding period last year.

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Analyst Reactions: Emkay Global maintained its “buy” rating for the stock with a price target of ₹2,000. The brokerage said that CreditAccess Grameen remains its preferred pick in the MFI space, given its superior return ratios and well-placed management succession, unlike peers.

HDFC Securities also upgraded the stock’s rating from “add” to “buy” raising the price target to ₹1,920 from ₹1,720. The brokerage firm said that the company’s March quarter earnings were ahead of estimates, driven by steady NIMs (13.1%) and healthy loan growth. The analysts said that the recent correction in the stock has made the risk-reward attractive and is one of the reasons behind the upgrade.

Price Action: CreditAccess Grameen’s share price was up 1.74% to trade at ₹1,445.45 in early trade on Wednesday.

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