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TradingBells
CreditAccess Grameen (Buy)
CMP: ₹539.1
Target: ₹705
CreditAccess Grameen (CA Grameen) provides micro finance services for women from poor and low income households in India. The company offers micro-credit loans for income generation, family welfare, emergency, and home improvement, as well as life insurance and national pension scheme. It also provides retail finance loans, such as Grameen Udyog, Udyog Vikas loan, Grameen Savaari and Grameen Suvidha. The company was formerly known as Grameen Koota Financial Services Pvt Ltd and changed its name to CreditAccess Grameen in January 2018. The company was incorporated in 1991 and is based in Bengaluru, India.
We believe that CA Grameen is going to be the biggest beneficiary of financial inclusion as the government is working very aggressively to connect every Indian to the financial system. In spite of the NBFCs liquidity crisis, it performed very well without any disturbance in its operation. The government is encouraging women entrepreneurship where CA Grameen plays a vital role in this vision of government. In terms of valuation, it is trading at 3.2 book value which is far lower than other quality NBFCs where if we consider 40 per cent profit growth in FY20 then we can expect a target of ₹705 in this counter by the end of FY20.
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