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CreditAccess Grameen’s July-September quarter (Q2FY26) numbers were better than expected, but the near-term outlook remains mixed, according to CLSA. The brokerage maintained its hold rating on the stock, but raised its target price to ₹1,600 per share.
The company reported a profit after tax (PAT) of ₹130 crore in the second quarter, which was 52% higher than CLSA’s estimates. The earnings surprise was largely driven by lower provisioning expenses and higher other income.
Margins widened by about 50 basis points quarter-on-quarter, supported by higher lending yields and a lower cost of funds. CLSA expects margin gains to continue in the coming quarters.
However, the company raised its credit cost guidance for both the current year and the next in its post-earnings call. Management now expects FY26 credit costs to be 70–100 basis points higher than its earlier projection of 5.5-6%, due to a rise in overdue accounts following heavy rainfall in some regions.
Asset quality trends showed some improvement sequentially, but overdues remain above internal expectations.
Growth picked up during the quarter. Disbursements nearly doubled quarter-on-quarter, though assets under management (AUM) remained broadly flat. Management expects AUM growth to improve to 14–15% by the March quarter and said it is on track for 20% growth in the second half of FY26.
For the full year, growth is likely to be at the lower end of the company’s earlier 14–18% guidance range. Management also expects return on assets to move toward 4.5% in FY27.
CreditAccess stock was down nearly 2.8% down at ₹1,435.30 in early trade.
The company reported a profit after tax (PAT) of ₹130 crore in the second quarter, which was 52% higher than CLSA’s estimates. The earnings surprise was largely driven by lower provisioning expenses and higher other income.
Margins widened by about 50 basis points quarter-on-quarter, supported by higher lending yields and a lower cost of funds. CLSA expects margin gains to continue in the coming quarters.
However, the company raised its credit cost guidance for both the current year and the next in its post-earnings call. Management now expects FY26 credit costs to be 70–100 basis points higher than its earlier projection of 5.5-6%, due to a rise in overdue accounts following heavy rainfall in some regions.
Asset quality trends showed some improvement sequentially, but overdues remain above internal expectations.
Growth picked up during the quarter. Disbursements nearly doubled quarter-on-quarter, though assets under management (AUM) remained broadly flat. Management expects AUM growth to improve to 14–15% by the March quarter and said it is on track for 20% growth in the second half of FY26.
For the full year, growth is likely to be at the lower end of the company’s earlier 14–18% guidance range. Management also expects return on assets to move toward 4.5% in FY27.
CreditAccess stock was down nearly 2.8% down at ₹1,435.30 in early trade.
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