The shares of this smallcap NBFC involved in providing microfinance services to women plunged 18 percent on Monday after reporting a loss of 99.5 crores in its Q3 FY25 results and weak guidance by the company.
Price Action
With a market capitalization of Rs 12,779.30 crore, CreditAccess Grameen Ltd fell 18 percent in Monday’s trading session and made a low of Rs 750.05 per share compared to its previous closing price of Rs 913.90 per share.
What Happened
CreditAccess Grameen Ltd stock was in focus after the company announced its Q3FY24-25 results. They reported a net loss of 99.5 crores as compared to a profit of Rs 353.42 crore in Q3 FY24, down 128.2 percent year on year
The company’s interest income grew by 7.5 percent year on year from Rs 1,244.36 crore to Rs 1,337.62 crore in Q3FY25. On a quarter-on-quarter basis, the revenue dropped by 5.6 percent from Rs 1,417.74 crores.
In terms of total expenses, there was a whopping 84.3 percent rise from Rs 819.58 crore to Rs 1510.86 crore year on year.
Company Overview
CreditAccess Grameen Ltd stands as India’s leading NBFC Microfinance Institution, with its gross loan portfolio reaching approximately Rs 24,810 crore in Q3 FY25, a 6.1 percent increase from the previous year.
The company has established itself as a key player, holding 6 percent market share in the country’s microfinance sector. As of FY25, the company serves an active borrower base of more than 48 lakh individuals. Notably, around 84 percent of its borrowers are from rural areas, and approximately 28 percent are exclusive to the company.
Also read….
Expansion Plans
CreditAccess Grameen Ltd has a total number of 2,059 bank branches that have grown 8.7 percent from 1,894 in Q3 FY25. Expanding its offerings, the company has introduced a range of loan products, including unsecured business loans, higher-value business loans backed by mortgages, gold loans, and loans for new two-wheelers.
On January 24, the company partnered with Nagarro to implement the Temenos platform, enhancing digital transactions and self-service options. It also expanded robotic process automation for credit validations, loan approvals, and grievance management.
Management Guidance
The management of CreditAccess Grameen updated their full-year guidance during their Q2 FY25 earnings announcement on October 25, 2024. They revised their loan growth expectation to 7-8 percent, down from the previous range of 8-12 percent.
Additionally, credit costs were revised to 6.7-6.9 percent from 4.5-5 percent, while Return on Assets (RoA) is now expected to range between 2.3 percent and 2.4 percent, a decrease from the earlier guidance of 3-3.5 percent. Return on Equity (RoE) is now forecasted to be between 9.5% and 10 percent, down from the previous range of 12-14 percent.
For the December quarter, the company reported its Gross NPA at 3.99 percent, up from 2.44 percent at the end of the September quarter, while its Net NPA increased to 1.28 percent from 0.76 percent. Write-offs for the quarter stood at Rs 376.7 crore.
Written by Shwetha Sairam
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
