Buy CreditAccess Grameen; target of Rs 1600: Motilal Oswal

Motilal Oswal is bullish on CreditAccess Grameen recommended buy rating on the stock with a target price of Rs 1600 in its research report dated February 25, 2026.

Broker Research

February 26, 2026 / 12:09 IST

Buy

Motilal Oswal's research report on CreditAccess Grameen

CreditAccess Grameen (CREDAG) is emerging from the recent MFI stress phase with improving operating momentum, resilient portfolio retention, and a structurally stronger business mix. The normalization of asset quality trends, combined with retail finance-led diversification and improving spreads, positions the company for a sharp earnings recovery in FY27–28E. Despite accelerated write-offs during the stress cycle, CREDAG has broadly retained its AUM — a relative outperformance versus peers that witnessed sharper portfolio contraction. This resilience reflects strong borrower stickiness, with ~70–80% of disbursements extended to existing customers, and a meaningful normalization in group repayment behavior. Retail finance is now emerging as the key structural growth engine. Its share in AUM has risen from ~11% to ~14% in Dec’25 and is likely to drive overall AUM growth at 20%+, even as MFI (JLG) growth moderates to low teens (~10–12%). Over the medium term, management aims to achieve a balanced secured– unsecured mix within retail finance, strengthening portfolio diversification.

Outlook

We model an AUM/NII/PPoP/PAT CAGR of 21%/16%/13%/50% over FY26–28E, with RoA/RoE improving to ~4.5%/~17.5% by FY28E. At ~2.3x FY27E P/BV, the stock remains attractively valued. We reiterate our BUY rating with a TP of INR1,600 (premised on 2.4x Dec’27E BVPS).

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