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• AUM Growth: 11.8% Y-o-Y to INR25,133 crores.

• GL Book Growth: 9.3% Y-o-Y to INR24,188 crores.

• Retail Finance AUM: INR945 crores.

• Customer Base: Grew 7.2% Y-o-Y to 49.33 lakh.

• Branch Expansion: 55 new branches, totaling 2,031 branches.

• Net Interest Income: Grew 20.8% Y-o-Y to INR932 crores.

• Net Interest Margin (NIM): 13.5% for Q3 FY '25.

• Cost to Income Ratio: 30.7%.

• PPOP Growth: 19.5% Y-o-Y to INR672 crores.

• Collection Efficiency: 96.3% for Q2 FY '25.

• GNPA: 2.44%.

• NNPA: 0.76%.

• Credit Cost: INR420 crores for Q2 FY '25.

• Liquidity Position: Cash and cash equivalent of INR2,036 crores.

• Capital Adequacy: 26.1%.

• PAT: INR186 crores for Q2 FY '25.

• ROA: 2.1% for Q2 FY '25.

• ROE: 10.4% for Q2 FY '25.

• Warning! GuruFocus has detected 3 Warning Signs with NSE:CREDITACC.

Release Date: October 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CreditAccess Grameen Ltd (NSE:CREDITACC) reported a year-on-year AUM growth of 11.8% to INR25,133 crores, indicating robust business expansion.

• The net interest income increased by 20.8% year-on-year to INR932 crores, showcasing strong revenue generation.

• The company maintained a stable portfolio yield of 21.1% and an interest spread of 11.4%, which are among the lowest in the microfinance industry.

• CreditAccess Grameen Ltd (NSE:CREDITACC) has a strong capital adequacy ratio of 26.1%, providing a solid financial foundation.

• The company has a comfortable liquidity position with cash and cash equivalents of INR2,036 crores, amounting to 7.6% of total assets.

Negative Points

• There has been a temporary increase in delinquency across various geographies, impacting asset quality.

• The company witnessed a quarter-on-quarter decline of 4.4% in overall AUM and a 1% decline in the customer base.

• The cost to income ratio stood at 30.7%, indicating potential inefficiencies in cost management.

• Credit cost for Q2 FY '25 was high at INR420 crores, reflecting increased provisions due to elevated delinquencies.

• The company revised its FY '25 annual performance guidance downwards, anticipating lower loan portfolio growth and higher credit costs.

Q & A Highlights

Q: Given the increase in PAR (Portfolio at Risk) levels in certain states, when do you expect these numbers to stabilize, and is the current credit cost at its peak? A: Udaya Kumar Hebbar, MD & Whole Time Director, explained that the PAR increase is expected to stabilize in Q3 FY '25, with improvements anticipated in Q4. The credit cost is likely at its peak, and a moderation is expected from the next quarter as the company is already carrying significant provisions for the 15+ DPD (Days Past Due) book.