Synopsis:
CreditAccess Grameen plunged closely after Q2 FY26 revenue fell 32% YoY to Rs 126 crore, hit by weaker asset high quality as GNPA rose to three.65%. NIM dropped 20 bps to 13.3%. CLSA maintained a Maintain ranking however raised the goal to Rs 1,600, citing margin positive aspects and decrease provisions, although greater credit score prices are anticipated as a result of rain-hit overdues.
The shares of this main NBFC supplier that gives monetary providers to low-income households are in focus after reporting a poor monetary efficiency on this quarter. On this article, we’ll dive extra into the small print of it.
With a market capitalization of Rs 22,220 crore, the shares of CreditAccess Grameen Ltd reached a day’s low of Rs 1,373.85 per share, down 7 p.c from its earlier day’s closing value of Rs 1,474.60 per share. Over the previous 5 years, the inventory has delivered a return of 115 p.c, underperforming NIFTY 50’s return of 123 p.c.
Q2 Highlights
CreditAccess reported a internet curiosity revenue of Rs 976 crore in Q2 FY26, a progress of 4.7 p.c from its Q2 FY25 internet curiosity revenue of Rs 932 crore. Moreover, on a QoQ foundation, it grew by 4.2 p.c from Rs 937 crore.
Coming to its profitability, the financial institution reported a internet revenue decline of 32 p.c to Rs 126 crore in Q2 FY26 as in comparison with Rs 186 crore in Q2 FY25. Nevertheless, on a QoQ foundation, it grew by 109 p.c from Rs 60 crore.
NIM and Value of Borrowings declined by 20 bps to 13.3 p.c and 9.6 p.c in Q2 FY26, respectively. Moreover, its Value to Earnings ratio surged by 180 bps to 32.5 p.c throughout the identical interval.
Its Gross Mortgage Portfolio (GLP) grew by a minor 3 p.c to Rs 25,904 crore in Q2 FY26 as in comparison with Rs 25,133 crore in Q2 FY25. Nevertheless, on a QoQ foundation, it declined by 0.6 p.c from Rs 26,055 crore. Coming to its portfolio composition, its GLP comprised 85 p.c with Earnings Era Mortgage (IGL), adopted by 3 p.c with House Enchancment, 11 p.c with retail finance, and 1 p.c from Household Welfare.
It may be attributed primarily to a drop in debtors. Whole Debtors declined by 10 p.c to 44.4 lakh in Q2 FY26 as in comparison with 49.3 lakh in Q2 FY25 and declined by 2.7 p.c QoQ from 45.6 lakh in Q1 FY26.
Additionally, Disbursements grew by a staggering 33 p.c to Rs 5,322 crore in Q2 FY26 as in comparison with Rs 4,004 crore in Q2 FY25. Nevertheless, it declined barely by 2.5 p.c from Rs 5,458 crore in its earlier quarter.
Coming to its Asset High quality, it reported a GNPA of three.65 p.c in Q2 FY26, which elevated by 121 bps from 2.44 p.c in Q2 FY25. Additionally, NNPA elevated by 50 bps to 1.26 p.c in Q2 FY26 vs 0.76 p.c in Q2 FY25.
Analyst Feedback
Main brokerage, CLSA, has maintained its Maintain ranking on the inventory however has elevated its value goal to Rs 1,600 per share, signaling an upside potential of 15 p.c from its present market value.
CLSA cited that the corporate’s revenue was 52 p.c greater than its estimates, which was primarily pushed by decrease provisioning bills and better different revenue. Margins have been expanded by roughly 50 foundation factors QoQ, which was a results of each greater lending yields and a decreased price of funds. CLSA believes that margin enhancements will nonetheless be there within the subsequent quarters.
However, in its post-earnings name, the corporate elevated the credit score price steerage sign for each this yr and the following. Consequently, administration is now forecasting credit score prices in FY26 to be 70-100 foundation factors greater than their preliminary estimate of 5.5-6 p.c, as they attribute it to a rise within the variety of overdue accounts as a result of heavy rainfall in some areas.
Written by Satyajeet Mukherjee
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