CreditAccess Grameen surges 7%, stock hits 28-month high; here's why

Analysts say CreditAccess Grameen enters FY27 as a fundamentally superior franchise emerging from a severe MFI stress cycle, with its asset quality restored and growth re-ignited.

CreditAccess Grameen share price movement

 

Shares of CreditAccess Grameen hit a 28-month high of ₹1,614.85, soaring 7 per cent on the BSE in Monday’s intra-day deals amid heavy volume after the microfinance institution (MFI) company delivered a healthy June 2026 quarter (Q1FY27) earnings. 

 

The stock quoted at its highest level since February 2024, and had hit a record high of ₹1,794.40 on December 11, 2023.

 

At 01:34 PM, CreditAccess Grameen was quoting 4 per cent higher at ₹1,581.60, compared to a 0.82 per cent rise in the BSE Sensex. A combined 3.22 million equity shares changed hands on the NSE and BSE.

 

 

Brokerages see more upside in CreditAccess post Q1 results

 

CreditAccess Grameen management reiterated its medium-term asset under management (AUM) target of ₹50,000 crore by CY28, with borrower additions and retail portfolio expansion likely to remain the key growth drivers. The company aims to scale borrower additions to ~100k per month, supported by its expanding branch network. Growth will also be driven by the graduation of seasoned MFI customers into higher-ticket retail products, with Retail Finance now forming 20.6 per cent of AUM. Its Grameen Mahi platform is anticipated to further support customer acquisition, cross-sell opportunities, and digital engagement.

 

According to analysts at Motilal Oswal Financial Services, CreditAccess Grameen remains well-positioned for sustainable growth, supported by its deep rural presence, strong customer franchise and ability to graduate existing MFI customers into higher-ticket individual loans, enabling portfolio diversification. Stable margins, improving asset quality and prudent risk management further provide confidence in the medium-term outlook, the brokerage firm said.

 

The company delivered a strong quarter, supported by healthy AUM growth, improving asset quality, and resilient operating performance. Portfolio at risks (PAR) trends have continued to improve, while the absence of any visible impact from external factors, such as the West Asia crisis or El Niño, provides further comfort on growth prospects and asset quality. 

 

With credit costs expected to trend towards the lower end of guidance if the macro environment remains stable, continued focus on borrower additions, retail portfolio expansion, and prudent risk management should boost sustainable growth, the brokerage firm said. It reiterated a 'BUY' rating on the stock with a revised target price of ₹1,880 (based on 2.5x Mar’28E P/BV).

 

Analysts at Axis Securities also maintained a 'BUY' recommendation on CreditAccess with a target price of ₹1,900 per share.

 

CreditAccess Grameen enters FY27 as a fundamentally superior franchise emerging from a severe MFI stress cycle, with its asset quality restored, balance sheet strengthened, and growth re-ignited, driving a sharp earnings recovery. Portfolio stress continues to normalise, with disciplined underwriting, stable collection efficiencies, and the absence of any meaningful stress indicators providing confidence that credit costs should remain within the guided 3-4 per cent and undershoot in case of weather-related or West Asia conflict-related risk not playing out. 

 

Growth visibility remains robust, underpinned by sustained customer additions in the MFI business and the successful graduation of seasoned borrowers into higher-ticket secured retail products. Focus remains on optimising pricing to consistently deliver RoA of 4-4.5 per cent. CreditAccess Grameen remains well positioned to benefit from the ongoing recovery in the MFI cycle, while its evolution into a diversified inclusive financier franchise is expected to improve scalability, strengthen portfolio resilience, and drive strong earnings over the medium term, the brokerage firm said.  ==================================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.