CREDITACCESS GRAMEEN LIMITED — PPTs, 16-05-2025: Investor Presentation

1. Financial Highlights:

CreditAccess Grameen’s Gross Loan Portfolio stood at INR 25,948 Cr, down 2.9% YoY but up 4.6% QoQ excluding write-offs. Net Interest Income rose 11.1% YoY to INR 3,623 Cr, and Pre-Provision Operating Profit increased 10.3% YoY to INR 2,638 Cr. However, Profit After Tax fell 63.2% YoY to INR 531 Cr, weighed down by higher credit costs. Asset quality showed GNPA at 4.76%, NNPA at 1.73%, and PAR 90+ at 3.28%, with conservative provisioning at 5.07%. Capital adequacy remains strong (CRAR 25.4%). Collection efficiency excluding arrears was 91.9%, with the borrower base at 46.94 lakh and branch count rising 4.9% to 2,063.

2. Strategic Initiatives & Growth Drivers:

Focus on balanced microfinance growth alongside retail finance, which expanded to 5.9% of the portfolio. Efforts continue to deleverage borrowers with multiple lenders. Digital investments in automation, real-time credit checks, and cashless disbursements are enhancing operational efficiency. Expansion targets contiguous districts with deeper penetration, backed by capex for 100 new branches planned in FY25.

3. Business Developments:

No acquisitions or partnerships announced. Operationally, the company accelerated write-offs (~INR 518 Cr in Q4) and increased provisions to manage delinquencies, notably in Karnataka. Robust risk controls include employee rotations and multi-layered group lending to mitigate credit risks and overleveraging.

4. Market Position & Competitive Advantage:

CreditAccess Grameen is a low-cost organized lender with a diversified rural product suite, strong leadership, and extensive reach across 16 states plus 1 UT via 2,063 branches. Disciplined underwriting and proactive provisioning distinguish it in a stressed microfinance market. High borrower retention (87%) reflects strong customer loyalty.

5. Investor Implications:

Near-term profitability is pressured by credit costs and regional delinquencies, but strong capital, improving asset quality, and retail finance expansion signal positive growth potential. Execution risks around asset quality normalization merit attention. Technology upgrades and cost control support scalability. Guidance points to steady portfolio growth (14-18%), stable margins (~12.6-12.8%), and gradual credit cost normalization, aiding improving returns (ROA 2.9-3.4%, ROE 11.8-13.3%).