CreditAccess Grameen surges 9%, stock nears 52-week high; here's why

Business Standard

7 hours ago

CreditAccess Grameen share price
Shares of CreditAccess Grameen surged 9 per cent to ₹1,355 on the BSE in Friday's intra-day trade amid heavy volumes after the company's business momentum improved, coupled with stabilizing asset quality in the June 2025 quarter (Q1FY26).
With today's rally, the stock price of CreditAccess Grameen has recovered 81 per cent from its 52-week low of ₹750.05 touched on January 27, 2025. It had hit a 52-week high of ₹1,369.25 on July 4, 2024.
At 10:14 AM; the stock was trading 7 per cent higher at ₹1,329.60, as compared to 0.01 per cent rise in the BSE Sensex. The average trading volumes at the counter jumped nearly 10-fold, with a combined 3.82 million shares changing hands on the NSE and BSE.
CreditAccess Grameen Q1FY26 update
CreditAccess Grameen has reported a marginal 0.4 per cent quarter-on-quarter (QoQ) rise in gross loan portfolio (GLP) to ₹26,055 crore in the June 2025 quarter (Q1FY26), reflecting modest growth post write-offs of ₹693 crore. The microfinance institutions (MFI) had posted GLP of ₹25,948 crore in Q4FY25.
Karnataka GLP increased slightly to ₹8,104 crore (vs. ₹8,068 crore in Q4), while other states' GLP rose to ₹17,951 crore (vs. ₹17,879 crore). Portfolio at Risk metrics showed improvement: overall PAR 0+ declined to 5.9 per cent (vs. 6.9 per cent in Q4), with PAR 0+ excluding Karnataka dropping to 4.4 per cent (vs. 6.1 per cent). The company added ~2 lakh new borrowers during the quarter supporting continued business momentum.
CreditAccess Grameen said the Q1FY26 sets a new benchmark, driven by highest first quarter disbursement and strong business momentum. The company delivered a healthy QoQ growth of 3.1 per cent (pre write-off basis) while fully adhering with MFIN Guardrails.
Considering the evolving business environment, the management in May month said that they are aiming for asset under management (AUM) growth of 14-18 per cent of which MFI growth will be 8-12 per cent and the balance from retail finance, NIM of 12.6-12.8 per cent, credit cost of 5.5-6.0 per cent, ROA of 2.9-3.4 per cent and ROE of 11.8-13.3 per cent in FY26.
Brokerages view on CreditAccess Grameen
Improving asset quality and gradual stabilization in performance post accelerated write-offs; sustained improvement in collection efficiency indicates gradual recovery. However, higher exposure in Karnataka amid concerns on collections remains watchful, ICICI Securities said in a note.
A trend reversal is on the horizon in the MFI sector and is expected to play out over the next couple of quarters, with the sector likely nearing normalization by H2FY26. That said, Motilal Oswal Financial Services strongly believes that the upcoming three months present an opportunity to separate high-quality franchises from weaker ones, with performance divergence across the MFI sector expected to be increasingly evident.
Backed by a strong capital position (Tier-1 of ~24 per cent), CreditAccess Grameen is well-placed to embark on a healthy loan growth trajectory as delinquency trends show further signs of normalization. CreditAccess Grameen trades at 2.0x FY27E P/BV, and its premium valuation over MFI peers is likely to sustain, driven by stronger confidence in its ability to return to normalcy ahead of its peers, the brokerage firm said.
About CreditAccess Grameen
CreditAccess Grameen is a leading Indian microfinance institution headquartered in Bengaluru, focused on providing micro-loans to women customers predominantly in rural areas across India. The company is now operating across 423 districts in 16 states and one union territory (Puducherry) through 2,063 branches. The company's promoter is CreditAccess India B.V., a multinational company specializing in micro and small enterprise financing. It is backed by institutional investors and has a micro-lending experience in India of more than a decade.