Accumulate CreditAccess Grameen; target of Rs 1,487: Deven Choksey

Deven Choksey recommended accumulate rating on CreditAccess Grameen with a target price of Rs 1,487 in its research report dated November 03, 2025.

Broker Research

November 05, 2025 / 16:01 IST

Accumulate

26 Aug, 2025 12:21

Volume

Todays L/H

Deven Choksey's research report on CreditAccess Grameen

CreditAccess Grameen reported a resilient Q2 FY26 performance, maintaining steady growth momentum across key business parameters. Assets under Management (AUM) rose 3.1% YoY to INR 2,59,040 mn, supported by a strong 32.9% YoY increase in disbursements to INR 53,220 mn. NII grew by 4.2% QoQ and 4.7% YoY to INR 9,759 mn beating our estimate of INR 8,847 mn. Total income increased sequentially to INR 15,090 mn, while pre-provision operating profit rose to INR 6,948 mn. PBT surged 108.7% QoQ to INR 1,692 mn, and PAT doubled sequentially to INR 1258 mn, translating into an RoA of 1.8% and RoE of 7.1%.

Outlook

The company continues to demonstrate strong disbursement traction, while margins should remain resilient supported by declining funding costs, recent pricing actions, and operating leverage from scale. Capital adequacy and liquidity remain healthy, providing headroom for growth. Nonetheless, credit costs are expected to remain elevated through FY26 owing to ECL model recalibration and slower PAR normalization. A return to steady-state ROA levels likely by FY27 as the portfolio mix matures and credit costs taper. We expect earnings momentum to strengthen from H2FY26, driven by lower cost of borrowings, robust loan book expansion, and gradual normalization of credit costs ahead. We value CreditAccess Grameen at 2.6x Mar’27E ABVPS, translating into a target price of INR 1,487 per share, and reiterate our “ACCUMULATE” rating.

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