CREDITACC - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.7

📊 Core Financials

Earnings & Profitability: EPS of ₹12.2 and PAT of ₹60.2 Cr show improvement over the previous quarter, but the 84.9% quarterly profit variation suggests volatility.

Return Metrics: ROE at 7.86% and ROCE at 9.55% are modest, indicating room for operational efficiency.

Debt Profile: Debt-to-equity of 2.94 is high, typical for NBFCs, but requires careful monitoring in rising rate environments.

Cash Flow: Not explicitly stated, but high leverage and moderate ROE suggest cash flow management is critical.

💰 Valuation Indicators

Metric Value Insight

P/E Ratio 115 Extremely overvalued vs. industry PE (62.5)

P/B Ratio ~3.19 Reasonable premium over book value

PEG Ratio 7.85 Significantly overvalued relative to growth

Dividend Yield 0.72% Modest, not a major income play

Valuation is stretched, and the PEG ratio flags caution despite recent earnings momentum.

🏦 Business Model & Competitive Advantage

CreditAccess Grameen Ltd. is a leading microfinance institution focused on rural India. Key strengths include

Deep penetration in underserved regions

Strong borrower relationships and high repayment discipline

Scalable model with tech-enabled lending and collections

The company has delivered 124.1% returns over 5 years with a 45.5% profit margin

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. Despite high valuation, its niche positioning and social impact make it attractive to long-term investors with higher risk appetite.

📈 Technical & Sentiment Indicators

RSI: 61.8 – Approaching overbought territory.

MACD: 7.95 – Bullish momentum.

Volume Surge – Above weekly average, indicating strong interest.

DMA 50 & 200: Price is above both, confirming medium-term strength.

Technical trend has recently turned bullish, supported by MACD and moving averages

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💡 Investment Strategy

🔽 Entry Zone

Ideal Buy Range: ₹1,300–₹1,340, near DMA 50 and below current price.

Current Price ₹1,390: Slightly above ideal entry, but still within accumulation zone.

🕰️ Long-Term Holding

Hold or Accumulate on Dips: Strong rural footprint and improving profitability make it a potential long-term compounder.

Watch Valuation & Asset Quality: Elevated P/E and high debt warrant caution. Monitor quarterly earnings and borrower metrics.

You can explore CreditAccess Grameen’s technical outlook or review its share price targets and valuation analysis for deeper insights. Let me know if you'd like a peer comparison with Aavas Financiers or Spandana Sphoorty.

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