Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

CreditAccess Grameen - Customer activation trend shows resilience - ICICI Securities

Posted On: 2020-08-04 09:31:37 (Time Zone: Arizona, USA)


CreditAccess Grameen's (CAGL) Q1FY21 result is characterised by strong core operating performance (standalone PPoP up 37% YoY), focus on strengthening balance sheet (contingency buffer of ~2.2% of consolidated AuM) and cautious approach towards growing balance sheet (to our liking fresh disbursements fell 98% YoY/QoQ). Further, July'20 collection efficiency at 76%, of which ~64% customers are paying fully, reflects its strong business resilience and strategically collected interest on moratorium (April/May'20) along with June'20 collections to eliminate imminent risk of collection disruption in case of higher EMIs due to moratorium. Though the merger brings in synergy, non-paying customers at 17% and Madura's lower collection poses near-term risk. However, strong execution track record, weekly collection model, improving customer activation rate and ability to raise funds at competitive rates, would ensure CAGL emerging stronger in post Covid-19 era. Maintain BUY.

- Strong operating performance. CAGL delivered PAT at Rs636mn in Q1FY21 driven by strong operating performance with - 1) standalone PPoP growing by 37% YoY driven by cost flexibility (opex down ~18 QoQ), 2) margin expansion (~60bps QoQ) and 3) support of securitisation income of Rs200mn. Notably, it continued to demonstrate its ability to raise funds at competitive rates even during the most challenging period, it raised ~Rs10bn in Q1FY21 with marginal cost of borrowing at 8.7% (lower by 70bps) than blended cost of borrowing at 9.4%.

- Collection efficiency and customer activation trend encouraging. Collection efficiency improved sharply to 74%/54% in June'20 for CAGL/MMFL, respectively, backed by its strong customer connect and weekly collection model. However, it remained static in July'20 at 76%/64% due to lower collection in urban pockets of Maharashtra, Tamil Nadu and Karnataka. Collection efficiency (ex-Maharashtra) stands at >80%. Customer activation, too, remained encouraging at 83%, of which ~64% of customers are paying fully, while ~19% are paying partially and ~17% customers are still under full moratorium. Management highlighted that by the end of August'20, it expects moratorium book to fall to 4-5%.

- Contingency buffer at ~2.2% of consolidated AuM. Management remained committed in building adequate Covid-19 related contingency buffer with it providing ~Rs1.5bn during Q1FY21; contingency buffer stands at Rs2.5bn or ~2.2% of consolidated AuM. Total provisioning cover on moratorium book as of June'20 stands at ~18%/9% for CAGL/MMFL, respectively.

- Cautious approach in fresh disbursements. Disbursements resumed in the last week of June and gradually ramped up in July'20 with cumulative disbursement of Rs5.7bn June/July'20, which is ~72% of July'19 disbursements. Fresh disbursements over medium term would be strictly to existing customer base with good payment track record and people who have cleared all dues.

Shares of CreditAccess Grameen Ltd was last trading in BSE at Rs.547 as compared to the previous close of Rs. 531.35. The total number of shares traded during the day was 13266 in over 544 trades.

The stock hit an intraday high of Rs. 557.9 and intraday low of 536.1. The net turnover during the day was Rs. 7372209.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

HDFC Bank Q3 FY21 - 'Stellar Show' - Retain BUY and raise 12m PT to Rs1870 - YES Securities

IPO Review - Indian Railway Finance Corporation (IRFC) - ICICI Direct

HCL Technologies - Q3FY21 First Cut - ICICI Direct

Logistics Sector Update - Indian Railways - getting aggressive - HDFC Securities

Indigo Paints - IPO view - YES SECURITIES

Infosys - Near-term margins will likely come under pressure - ICICI Securities

CESC - 7% dividend yield + higher ESG rating - ICICI Securities

South Indian Bank - Unveils vision 2024; targets RoA / RoE of 1% / 13% by 2024 - ICICI Securities

Maintain BUY on Infosys - Growth certainty on explosive deal wins - HDFC Securities

Maintain ADD on Wipro - Growth acceleration - HDFC Securities

Consumer Durables - Q3FY21 Results Preview - HDFC Securities

Q3FY21 Company Update - Filatex India - ICICI Direct

Q3FY21 Result Update - Wipro Ltd - ICICI Direct

Q3FY21 Result Update - CESC - ICICI Direct

Monthly Inflation - December 2020 - ICICI Direct

Q3FY21 Result Update - Infosys - ICICI Direct

Banks Q3FY21 Results Preview - Scope for optimism beyond a tepid 3Q - HDFC Securities

Consumer Discretionary Companies - Q3FY21 Results Preview Report - HDFC Securities

Pharma Sector Update - Ample catalysts to sustain luster - HDFC Securities

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on IIP data

Infosys - Q3FY21 First Cut - ICICI Direct

Wipro - Q3FY21 First Cut - ICICI Direct

HDFC Securities - Real Estate Q3FY21 Results Preview - Has COVID triggered a new cycle?

Industrials Q3FY21 Results Preview - Normalisation done, growth awaited - HDFC Securities

FMCG & Alco Bev - Q3FY21 Results Preview - HDFC Securities

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research on December 2020 CPI Data

Cement & Building Materials (Tiles) - Results Preview - Robust Performance on Improved Volume - Reliance Securities

Automobile & Auto Ancillary - Results Preview - Strong Results on Healthy Volume Performance in 3QFY21 - Reliance Securities

Q3FY21 Result Update - Tata Consultancy Services - ICICI Direct

Q3FY21 Result Preview - Real Estate & Infrastructure - ICICI Direct

Q3FY21 Result Update - Avenue Supermarts - ICICI Direct

Q3FY21 Result Preview - Metals & Mining - ICICI Direct

Insurance and Capital Markets Companies Q3FY21 Results Preview - Stronger earnings expected across sectors - HDFC Securities

Capri Global Capital - Getting back to normalcy - ICICI Securities

Avenue Supermarts - Fast recovery; there are speed breakers though - ICICI Securities

Tata Consultancy Services - Steady state growth / margins are yet to be seen! - ICICI Securities

Q3FY21 Result Preview - FMCG - ICICI Direct

Cement Sector - Q3FY21 Results Preview - HDFC Securities

Avenue Supermart Q3FY21 Results - Views of YES SECURITIES

The Phoenix Mills - Festive season ushers in consumption revival - ICICI Securities

Quant Pick - Zee Entertainment - ICICI Direct

Q3FY21 Result Preview - Auto and auto ancillary - ICICI Direct

Q3FY21 Result Preview - Capital Goods & Power - ICICI Direct

Q3FY21 Result Preview - Consumer Discretionary - ICICI Direct

Q3FY21 Result Preview - Banking & Financial Services - ICICI Direct

Q3FY21 Result Preview - Cement - ICICI Direct

Stock Tales - Esab India - ICICI Direct

TCS - Q3FY21 First Cut - ICICI Direct

NHPC - Receivables decline; pending issues cleared - ICICI Securities

ICICI Securities - Telecom - Bharti Airtel to outperform yet again...



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020