CreditAccess Grameen Limited , India's largest Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI), has reported a significant quarter-on-quarter improvement in its financial performance for Q2, despite facing seasonal headwinds.

Key Financial Highlights

• Net Profit: INR 125.80 crore, up 109% from INR 60.20 crore in Q1
• Total Income: INR 1,509.02 crore, a 3.1% increase from Q1
• Net Interest Income (NII): INR 975.90 crore, up 4.2% quarter-on-quarter
• Pre-Provision Operating Profit (PPOP): INR 694.80 crore, a 6.4% rise from Q1

Asset Quality Improvement

The company witnessed a gradual stabilization in asset quality:

• Gross Non-Performing Assets (GNPA) decreased to 3.65% from 4.70% in Q1
• Net Non-Performing Assets (NNPA) reduced to 1.26%
• Portfolio at Risk (PAR) 90+ days past due stood at 2.50%
• Provision coverage ratio improved to 66.27%

Business Growth

Despite the traditionally weaker second quarter, CreditAccess Grameen maintained robust business momentum:

• Gross Loan Portfolio (GLP) reached INR 25,904.00 crore, a 3.1% year-on-year growth
• Disbursements increased by 32.9% year-on-year to INR 5,322.00 crore
• Added 2.20 lakh new borrowers, with 39% being new-to-credit
• Retail Finance portfolio crossed the INR 2,500.00 crore mark

Operational Metrics

The company continued to expand its reach and operational capacity:

• Branch network grew by 8.8% year-on-year to 2,209 branches
• Employee base increased by 10.9% year-on-year to 21,701
• Collection Efficiency (including arrears) improved to 94.9% in September

Management Commentary

Mr. Ganesh Narayanan, Managing Director and CEO, stated, "We reported an improved second-quarter performance, reflecting consistent business momentum. Despite the seasonally weaker nature of the second quarter, the outcome built on the strong trajectory established in Q1, demonstrates the underlying strength of our business."

New Leadership Appointment

The company announced the appointment of Mr. Manoj Kumar as the Chairman of the Board, effective October 28. Mr. Kumar, who has been a board member since October 2019, brings extensive experience in banking, capital markets, and fintech to his new role.

Outlook

CreditAccess Grameen remains optimistic about its future performance, citing the following factors:

• Consistent deleveraging with a reduction in borrowers with multiple lenders
• Increasing share of unique borrowers, reaching 41.3% in September
• Declining new PAR accretion driving sequential reduction in credit costs
• Strong liquidity position with INR 2,175.50 crore in cash, cash equivalents, and investments

The company's focus on rural markets, customer-centric approach, and improving asset quality position it well for sustained growth in the coming quarters.

Note: All figures are based on standalone financial results unless otherwise specified.

CreditAccess Grameen Limited , a leading microfinance institution in India, has reported sequential improvement in its Q2 performance, with profit after tax rising 109% quarter-on-quarter to ₹125.8 crore. The company's financial results reveal a mixed performance, showing growth in some areas while facing challenges in others.

Key Financial Highlights

• Profit Growth: The company's profit after tax increased significantly on a quarter-on-quarter basis, reaching ₹125.8 crore.

• Loan Portfolio: The Gross Loan Portfolio (GLP) stood at ₹25,904.00 crore as of the end of Q2, showing a 3.1% year-over-year growth.

• Disbursements: CreditAccess Grameen reported disbursements of ₹5,322.00 crore in Q2, a 32.9% increase compared to the same quarter last year.

• Asset Quality: The company showed signs of stabilizing asset quality, with Portfolio at Risk (PAR) 0+ declining from 5.9% to 4.7% quarter-on-quarter. The Gross Non-Performing Assets (GNPA) ratio improved to 3.65%.

Operational Performance

CreditAccess Grameen demonstrated resilience in its operational metrics:

• New Borrowers: The company added 2.20 lakh new borrowers, with 39% being new-to-credit customers.

• Unique Borrowers: The portfolio share of unique borrowers increased to 41% from 36% in the previous quarter.

• Liquidity and Capital Adequacy: The company maintained liquidity of ₹2,175.50 crore and a capital adequacy ratio of 26.1%.

Financial Management

• Credit Cost: Credit cost declined sequentially to ₹525.70 crore, despite accelerated write-offs of ₹682.90 crore during the quarter.

Management Changes

• Mr. Manoj Kumar was appointed as Chairman of the Board.

Outlook

While the company faces ongoing challenges, it maintains a positive outlook based on:

• Gradual stabilization in asset quality
• Strong business momentum in disbursements
• Focus on new borrower additions, particularly new-to-credit customers
• Maintained liquidity and capital adequacy

CreditAccess Grameen's Q2 results reflect the company's efforts to navigate the challenges in the microfinance sector while focusing on growth and asset quality improvement. The sequential improvement in profit and stabilizing asset quality are positive signs, but the company will need to continue balancing growth with prudent financial management in the coming quarters.