Expansion plans & easing asset woes to lift CreditAccess
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
ET Intelligence Group: The stock of CreditAccess Grameen has gained nearly 12% over the past eight trading sessions after the country's largest microfinance lender announced the appointment of Ganesh Narayanan as the new managing director and CEO on August 6 after RBI's approval. The sector indices have gained over 1% during the period.The company has undertaken accelerated write-offs to clean up the loan book , which has resulted in higher credit costs. The situation is expected to normalise from the December quarter.Given the company's plan to open 200 branches in the current fiscal year and receding pressure on asset quality , the credit growth is expected to be higher in the second half of the current fiscal year.Dwindling credit quality in the microfinance segment over the past few quarters has affected the performance of CreditAccess. For its overall portfolio, 90-day PAR (portfolio at risk ratio) shot up to 3.3% from 1.1% in the year-ago quarter. The company has suffered a greater asset quality stress in Karnataka, which accounts for nearly one-third of its loan book. The PAR ratio for Karnataka in the 90 days and above category increased to 5.1% in the June quarter from 2.4% in the previous quarter.According to the company management, Karnataka has started showing stabilisation in PAR in the current quarter. In addition, the implementation of stricter norms for loan disbursement has reduced the proportion of highly leveraged borrowers (which have borrowed from three or more lenders) to 11.4% in June from 25.3% last August.The credit cost increased to ₹571.9 crore in the June quarter from ₹420.1 crore in the September 2024 quarter. This was largely due to accelerated write-offs as the proportion of new PAR accretion in the credit cost fell to 61% from 90% during the period. This raises hope that credit costs may ease in the second half of the current fiscal year.Apart from asset cleanup, the company has also increased focus on retail financing, which is likely to form 12-15% of the loan book by FY28. The segment contributed 7% to the gross loans in the June quarter compared with 3% in the year-ago quarter.Axis Securities expects annual growth in loan book and net profit at 18% and over 50% between FY25 and FY28. It has raised target price to ₹1,485 from earlier ₹1,350, implying FY27 expected price-book multiple of 2.5. Stock was last traded at ₹1,351 on Tuesday on the BSE.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
3 hours ago
- Mint
Small-cap stock under ₹100 in focus after THIS order book update; do you own?
Small-cap stock under ₹ 100: Globe Civil Projects shares will be in focus of the stock market investors on Friday, 22 August 2025, after the company announced that its order book has crossed ₹ 1,000 crore, according to an exchange filing. "Globe Civil Projects Limited is pleased to announce that its consolidated order book has crossed ₹ 1,000 crore, marking a significant milestone in the company's growth journey," the company informed BSE through the filing. As per the company disclosure, the order book ranges with projects from sectors like institutional, healthcare, and government infrastructure. CPWD, NBCC, and TCIL, are among the top investors who have allocated their projects to the Civil Construction firm. IITs (Roorkee, Gandhinagar, Kanpur), IIMs (Udaipur, Lucknow-Noida), NIT Delhi, Central University Punjab, AlIMS Raipur, Burari Hospital, Income Tax Building Bangalore, and CPWD housing projects are among the project mix in Globe Civil Projects' order book. "Crossing the 1,000 crore order book milestone is a significant achievement for the company, reaffirming the trust our clients place in our integrated EPC capabilities. With nearly 90% of our portfolio comprising funded central government projects, we enjoy strong cash flow visibility and reduced working capital risks," the company said. Globe Civil Projects shares closed 2.95% higher at ₹ 82.30 after Thursday's stock market session, compared to ₹ 79.94 at the previous market close. The company announced its order book update during the market operating hours on 21 August 2025. Shares of Globe Civil Projects have given stock market investors 0.98% returns on their investment since its listing on the Indian stock market on 1 July 2025. The shares of the company are trading 6.23% lower in the last one-month period but have gained 0.38% in the last five market sessions on the Indian stock market. Globe Civil Projects shares hit their 52-week high level at ₹ 95 on 1 July 2025, while their 52-week low level was at ₹ 73.56 on 8 July 2025, according to the data collected from the BSE website. The company's market capitalisation (M-Cap) stood at ₹ 491.49 crore as of the stock market close on Thursday, 21 August 2025. Read all stories by Anubhav Mukherjee
&w=3840&q=100)
Business Standard
5 hours ago
- Business Standard
Future policy actions dependent on growth-inflation dynamics: Nagesh Kumar
Hopefully, the penal tariffs for Russian oil purchase will be withdrawn, and the ongoing bilateral trade negotiations will succeed in eventually bringing down the US tariffs on Indian exports to more premium Manojit Saha Mumbai Listen to This Article Nagesh Kumar, member of the Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC), says while the benign inflation outlook provides policy space, one has to watch how trade policy uncertainties play out, in an email interview with Manojit Saha. Edited excerpts: You have observed in the MPC minutes that the benign inflation outlook provides policy space. How much space do you see for further easing? The repo rate has been lowered three times since the February 2025 MPC meeting, bringing the total reduction to 100 basis points (bps), to support economic growth. Transmission of the repo rate cuts to
Time of India
5 hours ago
- Time of India
No district in Odisha falls below RBI benchmark on credit-deposit ratio: Minister
Kendrapada: In a significant development for financial inclusion in Odisha, no district currently falls below the Reserve Bank of India's (RBI) prescribed credit-deposit (CD) ratio benchmark of 40%. Tired of too many ads? go ad free now As of March 2025, the districts of Malkangiri, Rayagada and Kandhamal reported CD ratios of 55.3%, 59% and 57.4%, respectively, according to Pankaj Chaudhuary, minister of state for finance, in a written statement to Rajya Sabha on Thursday. Responding to a query from BJD's Sasmit Patra, minister Chaudhuary highlighted that the State Level Bankers' Committee (SLBC) regularly monitors the CD ratio to ensure compliance and progress. Credit deployment at the district level is strategically guided by the annual credit plan (ACP), which is crafted by SLBC in alignment with the potential linked credit plan (PLP) prepared by the National Bank for Agriculture and Rural Development (NABARD). The ACP sets district-specific and sector-specific targets for priority sector lending, encompassing agriculture, MSMEs and rural development. This plan is finalized in collaboration with banks and the state govt to align with both national and state-level financial inclusion goals. The minister noted that the effective implementation of ACP for the fiscal year 2024-25 has been commendable, with Malkangiri achieving 90.5%, Rayagada 121.8% and Kandhamal 78.4% of their respective targets, indicating robust credit deployment. To further bolster financial inclusion and access to institutional credit in these regions, several initiatives have been launched. These include credit outreach programs, financial literacy camps, the deployment of business correspondents and customer service points (CSP), and the provision of banking services to unbanked panchayats through CSP Plus banking outlets. Tired of too many ads? go ad free now Enhanced monitoring is conducted through block level bankers' Committees, district consultative committees and district level review committees. In line with the RBI's master directions on priority sector lending — targets and classification, districts are ranked based on per capita credit flow to the priority sector. An incentive framework has been established for districts with lower credit flow, while a dis-incentive framework is in place for those with higher credit flow. Starting from the fiscal year 2024-25, a higher weight of 125% is assigned to incremental priority sector credit in districts with lower credit flow (per capita PSL less than Rs 9,000) and a lower weight of 90% is assigned in districts with higher credit flow (per capita PSL greater than Rs 42,000), the minister added. These measures underscore the govt's commitment to enhancing financial inclusion and ensuring equitable credit distribution across Odisha's districts.
