Earnings |CreditAccess Grameen Ltd. (NSE: CREDITACC): Q3FY23 Results Out; Total Income rise 32% YoY

CreditAccess Grameen Ltd. (NSE: CREDITACC) is a leading Indian microfinance company that provides financial services to rural households and women in India. It was founded in 1999 and became a public limited company in 2018. The company operates in 228 districts across 14 states in India and serves over 14 million customers. Its services include microfinance loans, insurance, and other financial products aimed at improving the lives of low-income households.

CreditAccess Grameen, has reported strong Q3FY23 results. Consolidated total income increased by 31.9% YoY to Rs 909.7 crore, with net interest income (NII) increasing by 37.7% YoY to Rs 567.4 crore. Pre-provision operating profit (PPOP) increased by 38.7% YoY to Rs 379.5 crore, and impairment of financial instruments declined by 24.2% YoY to Rs 89.4 crore. The company’s total ECL provisions were Rs 344.6 crore (2.04%) against GNPA (largely @ 60 dpd) of 1.71%, and PAR 90 of 1.34%, with NNPA further reducing to 0.59%.

The company had a profit after tax (PAT) of Rs 216.8 crore, representing an 85.3% YoY increase from Rs 117.0 crore in the same period last year. CreditAccess Grameen had a robust liquidity position of Rs 1,439.9 crore of cash & cash equivalents, which amounts to 7.7% of the total assets, and a healthy capital position with standalone CRAR of 28.4% and consolidated CRAR of 24.7%. The company has been assigned AA-/Stable rating by India Ratings, A/Positive by CRISIL & ICRA.

Commenting on the performance, Udaya Kumar Hebbar, MD and CEO of CreditAccess Grameen, said, “The third quarter witnessed robust sequential improvement in business momentum, operating efficiency, asset quality and return ratios, culminating in yet another milestone of surpassing Rs 200 crore in quarterly net profit. We are confident of sustaining this profitability trend and further improving it over the coming quarters. Our gross loan portfolio grew by 21.9% YoY to Rs 17,786 crore. We added 3.05 lakh new borrowers taking the total borrower base to 39.39 lakh. Our asset quality remains amongst the best in class with a collection efficiency of 98% and net NPA (predominantly at 60 dpd) of 0.59%. Q3FY23 PAT grew by 85.3% YoY and 23.1% QoQ to Rs 217 crore, resulting in ROA of 4.6% and ROE of 18.8%. Whereas 9M FY23 PAT significantly grew by 170.3% YoY to Rs 533 crore. We reiterate our FY23 guidance of 4.0% – 4.2% ROA and 16.0% – 18.0% ROE.