CreditAccess Grameen surges 12% in range-bound market, nears all-time high

CreditAccess Grameen shares surged 12 per cent to Rs 587 in intra-day trade on the BSE on Friday in an otherwise range-bound market on the back of heavy volumes. The non-banking housing finance company's (NBFC's) stock was trading close to its record high level of Rs 591, touched on June 11, 2019 in intra-day trade.

The microfinance institution (MFI) made stock market debut on August 2018.

In comparison, the benchmark S&P BSE Sensex was down 0.03 per cent at 37,057 levels at 10:56 am. The trading volumes on the counter jumped more than 10-fold with a combined 174,177 equity shares changing hands on the NSE and BSE so far.

For the April-June 2019 quarter (Q1FY20), CreditAccess Grameen posted 33 per cent year on year (YoY) growth in net profit at Rs 96 crore, backed by lower provisioning. Net interest income grew 32 per cent at Rs 247 crore on a YoY basis. Assets under management (AUM) grew at a rate of 39 per cent YoY driven by the income generation & retail finance segment.

The assets quality improved year-on-year as well as on a sequential basis. In Q1FY20, the company's gross non-performing assets (NPA) stood at 0.55 per cent against 0.88 per cent in the year-ago quarter and 0.61 per cent in March 2019 quarter, while net NPA stood at NIL on quarter on quarter (QoQ). Net interest margin (NIM) improved to 14.4 per cent from 13.7 per cent on a QoQ basis.

The management said the rural markets seem to be temporarily witnessing subdued consumption demand and slower growth particularly in asset-based investments compared to last year.

“The rural dominant MFI growth was primarily driven by limited competition and strong credit underwriting. Margins remain unhindered amid rising cost of borrowings as the rise in share by the foreign borrowings subsidized for the cost,” analysts at Narnolia Financial Advisors said in result update.