CreditAccess Grameen Stock Drops Nearly 7% After Q2 Results; Analysts Mixed on Outlook

CreditAccess Grameen Limited's share price fell by nearly 7% on the BSE on Wednesday, October 29, following its September quarter (Q2 FY26) results, with analysts citing concerns about growth recovery.

Key Q2 Financials: Net profit rose 109% quarter-on-quarter but fell 32% year-on-year to ₹130 crore. Net Interest Income (NII) grew 6% year-on-year to ₹1,030 crore. Net Interest Margins (NIM) expanded 75 basis points Q-o-Q. Credit costs decreased to 8.7% from 9.4% in Q1 FY26. Asset quality improved, with Gross Non-Performing Asset (GNPA) ratio falling to 3.7% from 4.7% Q-o-Q.

Company Guidance: Disbursement and Assets Under Management (AUM) saw slight declines. Management lowered its FY26 AUM growth guidance to the lower end of 14-18% and projects RoA around 4% by FY26 exit. Credit cost guidance for FY26-27 was raised by 70-100 basis points due to higher PAR accretion and ECL provisioning.

Impact This news moderately impacts the Indian stock market, especially the financial and microfinance sectors. The stock's decline affects investor sentiment for CreditAccess Grameen and may influence caution towards similar companies. Revised guidance on credit costs and growth is a key investor focus. Rating: 6/10

Difficult Terms: Net Profit: Profit after all expenses and taxes. Net Interest Income (NII): Interest earned on assets minus interest paid on liabilities. NIM (Net Interest Margin): Profitability ratio based on interest-earning assets. Credit Costs: Expenses arising from loan defaults or potential loan losses. Gross Non-Performing Asset (GNPA) Ratio: Proportion of bad loans (non-performing) to total loans. Disbursement: The act of lending money or providing funds. Assets Under Management (AUM): Total market value of investments managed by a financial institution on behalf of its clients. FY26: Fiscal Year 2026 (typically April 1, 2025, to March 31, 2026). H2FY26: The second half of the Fiscal Year 2026. RoA (Return on Assets): Profitability relative to total assets, indicating efficiency. PAR Accretion: An increase in the number or amount of loans that are past due. ECL Provisioning (Expected Credit Loss Provisioning): Funds set aside for estimated future credit losses on loans, based on an accounting standard.

Brokerage Views: Emkay Global maintained 'Add' (Target: ₹1,550), citing strong retail portfolio growth. Axis Securities maintained 'Buy' (Target: ₹1,685), optimistic on H2 growth despite near-term credit cost pressures. JM Financial downgraded to 'Add' (Target: ₹1,560), citing concerns over elevated credit costs and current valuations.