Profitability and Growth
CreditAccess Grameen, a notable player in microfinance, showcased mixed results recently. Despite a 46.7% drop in net profit to ₹186.1 crore in Q2 FY25, net interest income grew 17.7% to ₹968.7 crore. The company’s gross loan portfolio increased by 11.8% to ₹25,133 crore, with the borrower base expanding by 7.2%. Challenges included rising operational costs and higher provisions for bad debts.
Current Valuations
With a market cap of ₹15,687.5 crore, CreditAccess Grameen is competitively positioned among peers. The stock's 52-week high and low are ₹1,796 and ₹974.55, respectively. Analysts' recommendations vary, with some suggesting a "Buy" or "Strong Buy," reflecting potential for recovery.
Technical Analysis
After a 50% decline from its peak, the stock shows signs of undervaluation. A return of -33.44% over six months and -38.38% year-to-date suggests volatility, but potential for rebound exists if operational issues are addressed and asset quality improves. 840-875 is the short term support here and 1000-1020 is the immediate resistance. A cose above this could lead to decent pullback in the stock price.
Long-Term Investment Potential
Despite current challenges, CreditAccess Grameen holds promise for long-term investors. The management aims to grow the loan portfolio to ₹50,000 crore by FY28. Prospective investors should remain cautious of sector challenges and recent performance guidance revisions.
In summary, CreditAccess Grameen presents a potentially attractive long-term investment, but close monitoring of performance and market conditions is essential.
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