CreditAccess Grameen: PAT growth of 75% & Income growth of 47% in FY24 at a PE of 16 & price to book of 3.4
CreditAccess Grameen: PAT growth of 75% & Income growth of 47% in FY24 at a PE of 16 & price to book of 3.4
CREDITACC to grow at 20-25% CAGR. Strong internal accrual generation with 20-23% ROEs. Strong outlook for FY25-28. FY24 gives confidence in the managements ability to deliver on guidance
1. Non-Banking Financial Company-Micro Finance Institution
creditaccessgrameen.in | NSE: CREDITACC
One of the Leading NBFC-MFIs in India headquartered in Bengaluru
2. FY20-24: PAT CAGR of 44% & Total Net Income CAGR of 32%
3. 9M-24: PAT up 97% & Total Net Income up 52% YoY
4. Q4-24: PAT up 34% & Total Net Income up 36% YoY
PAT up 12% & Total Net Income up 14% QoQ
5. FY24: PAT up 75% & Total Net Income up 47% YoY
6. Strong and improving return ratios
7. Outlook: Strong guidance for FY25
i. FY25: Strong guidance … continuing the trend from FY24
ii. Long term outlook is attractive & looks achievable based on FY24 performance
8. PAT growth of 75% & Total Net Income growth of 47% in FY24 at a PE of 16
9. So Wait and Watch
If one holds the stock then one may continue holding on to CREDITACC
Coverage of CREDITACC was initiated after Q1-24 results. The investment thesis has not changed in FY24. Based on FY24 performance against guidance, there is confidence that CREDITACC is on track to deliver against the FY25-28 guidance set out by the management.
CREDITACC is in the middle of a strong run. PAT has increased sequentially in all the four quarters of FY24
The outlook till FY28 is strong enough to stay invested provided the CREDITACC management executes as per the guidance.
10. Or, join the ride
If one is looking to enter CREDITACC then
CREDITACC has delivered a strong FY24 with PAT growth of 75% & Total Net Income growth of 45% at a PE of 16 which makes the valuations reasonable in the short term.
CREDITACC has a net-worth of Rs 6570 cr and is available for a market cap of Rs 22,440 cr which implies that its available at price to book of 3.4. It makes the valuation look steep in the short-term and can be justified only if the growth momentum continues as per the guidance of FY25-28
Over the medium to long-term, the guidance for FY25-28 looks achievable given the growth trajectory seen in FY24 and hence can justify the steep price to book.
Previous coverage of CREDITACC
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