Capitaline

Analyst Meet / AGM 31-Oct-19

Conference Call

CreditAccess Grameen

Targets 30% CAGR AUM growth for next five years

CreditAccess Grameen conducted a conference call on 31 October 2019 to discuss its financial results for the quarter ended September 2019. Udaya Kumar Hebbar, MD and CEO of the company addressed the call:
Highlights:

The company has displayed resilient performance in Q2FY2020 amid severe floods in certain states / districts which impacted the day to day life for some of borrowers.
The gross loan portfolio increased 36% to Rs 7905 crore, driven by 27% growth in borrower base to 26.4 lakh end September 2019. Disbursements have increased 39% to Rs 2186 crore in Q2FY2020.
The company is targeting 30% CAGR AUM growth for next 5 years. The company does not see any deceleration in MFI loan demand, while reducing competitive intensity from other MFI players provides opportunity.
The company follows contiguous expansion approach which helps to maintain asset quality. The company does not see any overheating in its operating areas.
Untapped microfinance customer stands at 100 million with 75 million in rural, where the company operates.
The company does not see any headwind in its business at this point of time.
The company has added 1.4 lakh customers in Q2FY2020. The customer addition is normally slow in Q2 due to peak farm activity and unavailability of the customers. As per the company, about 33% of the customers are unique customers.
The outstanding ticket size per borrower stands at Rs 29000.
Branch network increased 35% to 887 branches with the addition of 217 new branches during H1 FY20, while the company proposes to focus on ramping up these branches during H2 FY20, leading to robust AUM growth in H2 FY20.
The company has strengthened its pan India presence by expanding in five new states - Gujarat, Rajasthan, Uttar Pradesh, Bihar and Jharkhand. This is in line with contiguous district based expansion strategy with strong rural focus.
The new branches start generating business in 3 months and achieves break even in 14 months.
The company believes that there is still significant scope for penetration of microfinance specifically in deep rural & unbanked areas. The pan India presence will help to realize mission to become a preferred business partner to low-income households lacking access to affordable credit.
Karnataka state contribute 51% of AUM end September 2019, while the company expects the share of Karnataka state to decline below 30% in next 3 years.
The liquidity position of the company remains comfortable, while the company is witnessing moderation in the cost of borrowings. Long term cost of funds stands at 7.5-11.5% and short terms is 8.5-9.5%, while the cost of borrowings is expected to be around 10% ahead.
The overseas cost of borrowings stands at 10.5-11.5%, while long term of overseas borrowings provides stability to balance sheet.
The company expects NIM to be maintained at 12.25-12.5%.
The costs were higher in Q2FY2020 on account of new branch and employee addition, while it would normalize ahead with growth in AUM.
The company has nearly completed its expansion for current year, while it does not see any significant increase in costs due to branch addition in next two quarters
Collection efficiency was healthy at 98.8%. The company has sufficient manpower for collection.
About 40-50 branches were impacted due to floods, causing some increase in stage 2 assets by Rs 10-11 crore and provisions. The company expects to return to normalcy from Q3FY2020.
The CRAR of the company is strong at 34.2% end September 2019.
The bank has maintained the guidance of net profit at Rs 425-450 crore, despite corporate tax rate due, due to higher provisions and DTA impact.
The effective rate for the company would be 25.17% going forwards.

Previous News

CreditAccess Grameen allots 1,987 equity shares under ESOP
( Corporate News - 21-Aug-24 14:49 )

CreditAccess Grameen Q3 PAT climbs 64% YoY to Rs 353 cr
( Hot Pursuit - 20-Jan-24 12:56 )

CreditAccess gains on raising Rs 989 cr via NCDs
( Hot Pursuit - 11-Sep-23 12:36 )

CreditAccess Grameen Ltd Falls 2.26%
( Hot Pursuit - 24-May-23 09:45 )

CreditAccess Gramee allots 18,637 equity shares under ESOP
( Corporate News - 24-Mar-23 19:05 )

CreditAccess Grameen allots 51,278 equity shares under ESOP
( Corporate News - 09-Jul-22 14:03 )

CreditAccess Grameen raises Rs 240 crore from Dutch development bank
( Corporate News - 21-Nov-22 19:11 )

CreditAccess Grameen receives upgrade in credit ratings
( Corporate News - 30-Jun-22 10:25 )

CreditAccess Grameen consolidated net profit declines 19.74% in the September 2021 quarter
( Results - Announcements 10-Nov-21 08:09 )

CreditAccess Grameen allots 5642 equity shares under ESOP
( Corporate News - 09-Apr-22 10:39 )

Board of CreditAccess Grameen to consider issuance of bonds
( Corporate News - 14-Feb-22 11:13 )