Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Maintain BUY on CreditAccess Grameen - Accelerated write-offs dents earnings - HDFC Securities

Posted On: 2021-05-07 11:52:50 (Time Zone: UTC)

Mr. Krishnan ASV, Institutional Research Analyst, HDFC Securities

CreditAccess Grameen's (CREDAG) consolidated 4QFY21 PPOP growth (93% YoY) was above our expectations, largely on account of higher other income (direct assignment - INR0.9bn). Disbursements continued the strong momentum (42%/3% YoY/QoQ) with improving collection efficiency (~94% excluding arrears in March'21). CREDAG took accelerated write-offs of 9% (annualised), bringing down GS-III to 4.43% with aggregate ECL at 5%, in line with its conservative risk recognition and provisioning policy. We revise our FY22/FY23 earnings estimates downwards by 0.4%/3.0% due to expected moderation in loan growth and marginal higher credit costs. We maintain BUY with a revised TP of INR 813 (from INR 819 earlier). Our assigned multiple, we believe, is reflective of CREDAG's high RoE potential, relatively conservative approach to the business as well as inherent business risks.

Disbursals sustain momentum; second wave likely to play spoilsport: Disbursements sustained the momentum with 42%/3% QoQ growth to INR42.3bn. New customer acquisitions were largely from Gujarat, Bihar, UP, Tamil Nadu, Kerala, and Rajasthan. The average outstanding of the borrowers increased to INR34.7k (17.4% YoY). However, the second wave of the pandemic is likely to impede the growth momentum in 1QFY22.

Accelerated provisions fortifying COVID buffer, likely to moderate: In line with its conservative NPA policy, CREDAG took accelerated write-offs of INR2.8bn (9% annualised), largely due to manifestation of the back-book stress. Non-tax provisions remained elevated at INR2.5bn (~8% annualized), bringing ECL to 5% (including 1% COVID buffer). It has provided for 69% PCR for restructured assets (~0.73% of loans). We build LLPs of 2.7% over FY22-FY23E, with upward revision of 10bps.

Stress easing in standalone entity; MMFL stress yet to ease: CAGL's PAR-60 halved to 3.5% during Q4, with increase in collection efficiency by ~300bps during the same period. However, MMFL's asset quality witnessed deterioration with PAR-60 increasing from 5.6% in 3QFY21 to 6.7% and collection efficiency at 90%.

Shares of CreditAccess Grameen Ltd was last trading in BSE at Rs.616 as compared to the previous close of Rs. 608.5. The total number of shares traded during the day was 14636 in over 1348 trades.

The stock hit an intraday high of Rs. 650 and intraday low of 605. The net turnover during the day was Rs. 9073472.

Source: Equity Bulls

Click here to send ur comments or to

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., 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. 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:

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities

JK Cement - Expansion to drive volume growth - ICICI Securities

Info Edge India - Concerns around Zomato's gig work unwarranted - ICICI Securities

Bharat Heavy Electricals - Higher provisioning impacts margins - ICICI Securities

Mahindra Lifespace Developers - Well poised for growth; initiate with BUY - ICICI Securities

Kajaria Ceramics - Q4FY21 First Cut - ICICI Direct

Gladiator Stocks - Tata Metaliks - ICICI Direct

Q4FY21 Result Update - Gail (India) - ICICI Direct

Q4FY21 Result Update - Engineers India - ICICI Direct

IPO Review - Shyam Metalics & Energy Ltd - ICICI Direct

Coal India - Q4FY21 First Cut - ICICI Direct

Capacite Infraprojects - Q4 FY21 results first cut: Robust performance - YES Securities

Cochin Shipyard - Q4 FY21 results first cut: Strong performance - YES Securities

CARE Ratings - Q4 FY21 results first cut: Stellar Performance - YES Securities

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

disclaimer copyright © 2005 - 2020