CreditAccess Grameen (CREDITACC) Q4 10/11 earnings summary

Executive summary

• FY2011 remained profitable despite the Andhra Pradesh ordinance and industry-wide funding disruption; revenue rose 65.37% to ₹82.33 crore and profit after tax reached ₹3.51 crore.

• Liquidity constraints curtailed lending and expansion in H2; portfolio fell from ₹330.18 crore in FY2010 to ₹250.50 crore at March 31, 2011.

Financial highlights

• Total revenue ₹82.33 crore vs ₹49.79 crore in FY2010; income from operations ₹78.71 crore vs ₹48.70 crore.

• Profit before tax ₹3.79 crore vs ₹1.88 crore; profit after tax ₹3.51 crore vs ₹0.95 crore.

• Financial expenses rose to ₹34.07 crore from ₹18.91 crore, reflecting higher borrowing costs and upfront securitization and buyout fees.

• Personnel expenses increased to ₹23.19 crore from ₹12.97 crore, driven by hiring for planned expansion; operating and other expenses rose to ₹13.64 crore from ₹8.79 crore.

• Loans disbursed during FY2011 were ₹606.69 crore vs ₹531.52 crore; portfolio outstanding was ₹250.50 crore vs ₹330.18 crore.

Outlook and guidance

• FY2012 loan disbursement target of ₹600 crore; plan to prioritize existing clients and deepen reach through current branches, with modest growth amid expected funding constraints.

• Plan to scale back non-operational branches, strengthen client screening through credit-bureau checks, and expand need-based housing, water, sanitation and alternative-energy products.

• New RBI regulations were expected to improve industry clarity, while funding and operating conditions were still expected to be challenging for much of the coming year.