Buy CreditAccess Grameen, target price Rs 1130: HDFC Securities

HDFC Securities has buy call on CreditAccess Grameen with a target price of Rs 1130. The current market price of CreditAccess Grameen is Rs 967. Time period given by analyst is one year when CreditAccess Grameen Ltd. price can reach defined target.

CreditAccess Grameen Ltd., incorporated in the year 1991, is a Mid Cap company (having a market cap of Rs 15109.45 Crore) operating in NBFC sector.

CreditAccess Grameen Ltd. key Products/Revenue Segments include Interest, Income From Sale Of Share & Securities, Other Services and Fees & Commission Income for the year ending 31-Mar-2022.



Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 760.52 Crore, down -7.76 % from last quarter Total Income of Rs 824.48 Crore and up 23.19 % from last year same quarter Total Income of Rs 617.37 Crore. Company reported net profit after tax of Rs 139.56 Crore in latest quarter.

Investment Rationale
The brokerage tweaks FY23E/FY24E earnings estimates for moderation in loan growth expectations and maintain BUY, with a revised TP of INR1,130 (3.0x Sep-24 ABVPS). It implied multiple reflects CREDAG’s high cross-cycle potential RoE and an extremely conservative underwriting approach to an inherently risky business.

Promoter/FII Holdings
Promoters held 73.74 per cent stake in the company as of 30-Sep-2022, while FIIs owned 8.67 per cent, DIIs 12.68 per cent.