CREDITACC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | CREDITACC | Market Cap | 20,396 Cr. | Current Price | 1,273 ₹ | High / Low | 1,568 ₹ |
| Stock P/E | 26.2 | Book Value | 490 ₹ | Dividend Yield | 0.00 % | ROCE | 9.96 % |
| ROE | 10.5 % | Face Value | 10.0 ₹ | DMA 50 | 1,296 ₹ | DMA 200 | 1,272 ₹ |
| Chg in FII Hold | 1.26 % | Chg in DII Hold | -0.64 % | PAT Qtr | 340 Cr. | PAT Prev Qtr | 252 Cr. |
| RSI | 45.6 | MACD | 12.6 | Volume | 2,60,339 | Avg Vol 1Wk | 1,74,722 |
| Low price | 1,096 ₹ | High price | 1,568 ₹ | PEG Ratio | -13.2 | Debt to equity | 3.01 |
| 52w Index | 37.5 % | Qtr Profit Var | 619 % | EPS | 48.5 ₹ | Industry PE | 22.4 |
📊 Financial Overview: CreditAccess Grameen (CREDITACC) shows mixed fundamentals. ROE at 10.5% and ROCE at 9.96% reflect modest efficiency. Debt-to-equity is high at 3.01, indicating leveraged operations typical of NBFCs. Dividend yield is 0%, with profits reinvested. Quarterly PAT rose sharply from ₹252 Cr. to ₹340 Cr. (619% variation), showing strong growth momentum, though sustainability remains uncertain.
💹 Valuation Indicators: Current P/E of 26.2 is slightly above the industry average of 22.4, suggesting premium valuation. P/B ratio is ~2.6 (1273/490), which is reasonable. PEG ratio is negative (-13.2), signaling weak growth prospects relative to valuation. Intrinsic value appears lower than current price, implying cautious accumulation.
🏢 Business Model & Advantage: CREDITACC operates as a microfinance NBFC, focusing on rural and semi-urban borrowers. Its competitive advantage lies in deep rural penetration, strong client relationships, and financial inclusion initiatives. However, high leverage and exposure to credit risk remain challenges.
📈 Entry Zone: A favorable entry zone lies between ₹1,150–1,200, closer to support levels and below intrinsic value. Current price (₹1,273) is slightly above this zone, so staggered accumulation is advisable.
🔒 Long-Term Holding Guidance: CREDITACC is a niche player in microfinance with strong growth potential, but high debt and modest return ratios make it risky. Long-term investors can hold cautiously, monitoring asset quality and regulatory developments.
Positive
- 🌟 Strong quarterly PAT growth (₹252 Cr. → ₹340 Cr.)
- 🌟 FII holdings increased (+1.26%)
- 🌟 Deep rural penetration and financial inclusion focus
Limitation
- ⚠️ High debt-to-equity (3.01)
- ⚠️ Low ROE (10.5%) and ROCE (9.96%)
- ⚠️ PEG ratio negative (-13.2)
- ⚠️ Dividend yield 0%
Company Negative News
- 📉 DII holdings reduced (-0.64%)
- 📉 High leverage increases credit risk exposure
Company Positive News
- 📈 FII holdings increased (+1.26%)
- 📈 Strong quarterly PAT improvement
Industry
- 🏦 Industry P/E at 22.4 reflects moderate valuations
- 🏦 NBFC microfinance sector growth supported by rural demand and financial inclusion policies
Conclusion
✅ CREDITACC has strong growth momentum and niche positioning in microfinance, but high leverage and modest return ratios make it risky. A better entry zone lies between ₹1,150–1,200. Long-term investors should hold cautiously, monitoring asset quality, debt levels, and regulatory changes.
Would you like me to also prepare a risk analysis focusing on credit exposure and regulatory challenges in the NBFC microfinance sector?