Harish Dhawan 28 October 2026

CreditAccess Grameen Share Price Could Reach Rs 1,400: ICICI Securities

ICICI Securities has maintained its BUY call on CreditAccess Grameen with a revised target price of Rs 1,400, about 36% above the current market price of Rs 1,027, over 12 months. The brokerage cut its target from Rs 1,800 after lowering its valuation multiple to about 1.9 times FY28 estimated book value, citing a changing rate cycle and drought and flood risks. Yet the September quarter was strong. Net profit rose to Rs 502 crore from Rs 126 crore a year earlier, assets under management grew 19.5% to Rs 30,946 crore, and the net interest margin widened to 15.1%. Management also raised its FY27 profitability guidance.

BUY MAINTAINEDQ2FY27 Result UpdateMicrofinanceTarget cut Rs 1,800 to Rs 1,400

CreditAccess Grameen: Cleaner books lift profits, but ICICI Securities prices in a harsher season

One of India's largest microfinance lenders posted its best asset quality in 10 quarters and nearly quadrupled its profit. The brokerage still trimmed the multiple it is willing to pay, leaving a 36% upside on a stock trading near its 52-week low.

Member loan card
CREDITACCESS GRAMEEN · No. Q2FY27/1400
Lender view ..... ICICI Securities
Rating .......... BUY
Disbursed at .... CMP Rs 1,027
Repays at ....... TP Rs 1,400 Rs 1,800
Gain on loan .... +36.3%
Basis ........... ~1.9x FY28E BV
52-wk range ..... Rs 1,013-1,634
Market cap ...... Rs 16,495 crore
MONTHLY SCHEDULE · 12 MONTHS

1234567891011TP

Rating	CMP	Target (12 months)	Upside	Valuation basis	52-week range
BUY	Rs 1,027	Rs 1,400 (earlier Rs 1,800)	36.3%	~1.9x FY28E book value	Rs 1,013-1,634

A quarter that repaired the ledger

The September quarter marked a decisive turn from last year's microfinance stress. Net interest income rose 33.5% to Rs 1,248 crore, pre-provision profit climbed 39.6% to Rs 970 crore, and provisions fell 43.1% to Rs 299 crore. Net profit, at Rs 502 crore, was almost four times the Rs 126 crore of the year-ago quarter.

Margin expansion did much of the work. Fewer interest reversals on bad loans, a higher-yielding individual-loan book and steady funding costs lifted the net interest margin 70 basis points sequentially to 15.1%. Cost-to-income improved to 28.2% from 29.3% in the June quarter, and annualised return on assets reached 5.8%.

Rs crore	Q2FY27	Q2FY26	YoY	Q1FY27	QoQ
Net interest income	1,248	935	+33.5%	1,164	+7.2%
Net total income	1,352	1,030	+31.3%	1,234	+9.5%
Operating expenses	381	334	+14.1%	362	+5.2%
Pre-provision profit	970	695	+39.6%	873	+11.2%
Provisions	299	526	-43.1%	213	+40.8%
Net profit	502	126	+298.7%	493	+1.7%
Gross loans	30,946	25,904	+19.5%	30,319	+2.1%

The graduation strategy

Growth now rests on moving seasoned group-loan borrowers into larger individual products. The group-loan book actually shrank 2% this fiscal year, after Rs 614 crore of first-half write-offs, while Retail Finance rose to 23.3% of AUM from 20.6% in the June quarter. Retail-exposed customers have outperformed pure microfinance borrowers over the past 12 to 14 months, and borrower retention improved to 88% from 85% in FY26.

Step 1 · Group loans

Rs 23,746 cr

76.7% of AUM · down 2% year to date · growth guided at 10-12%

🎓 ➜

6-8% of customers graduate each year

Step 2 · Retail Finance

~Rs 7,200 cr

Secured Rs 695 cr, +60.9%Two-wheeler Rs 60 cr+ (Rs 20 cr in Q1)Unnati: 7.7 yrs vintage, score 732Mortgage: 6.2 yrs, score 714

The intake funnel is widening too. The lender added 2.3 lakh borrowers in the quarter, 35% of them new to credit, for a first-half total of 4.9 lakh. The monthly run rate of about 80,000 is targeted to exceed 1 lakh a month from the second half. Sixty new branches took the network to 2,326 across 460 districts.

Emptying the stress buckets

Gross NPA eased to 1.79% and loans overdue by more than 90 days fell to 1.11%, the best in 10 quarters. Quarterly credit cost was 0.99%, non-annualised, including a higher provisioning rate; total expected-credit-loss cover rose to 3.31%, with a Rs 137 crore macro-prudential buffer.

Gross NPA

2.18% → 1.79%

PAR 90+

1.46% → 1.11%

Net NPA

0.76% → 0.59%

Grey bucket = June quarter, marigold bucket = September quarter. Fill drawn to scale against a 2.5% brim.

The weather has not been kind, however. Fresh slippage, measured by monthly PAR 15+ accretion, rose to 26 basis points in September from 16 in June as floods and the festive season disrupted collections.

Field advisory	What happened	Status	Response
☔ Bihar, UP, Chhattisgarh, MP	Floods lifted September accretion	NORMALISED IN OCTOBER	X-bucket collection efficiency 99.71%
☀ ~6 districts, central Maharashtra	Early drought stress; borrowers seek time and restructuring	WATCH	New sourcing paused, collection teams reinforced
Rest of the network	No impact observed	CLEAR	Credit cost seen at ~3.5-4% for FY27

Guidance moves up a class

Management raised its FY27 profitability targets even after cutting lending rates by about 50 basis points from October, a change that should flow through over at least four quarters. It aims to hold a risk-adjusted margin near 10% and a steady-state return on assets of 4.5% to 5%.

FY27 guidance	Earlier	Revised	Verdict
Net interest margin	12.8-13.2%	14.4-14.7%	🎓 PROMOTED
Cost-to-income	33-35%	29-30%	🎓 PROMOTED
Return on assets	4-4.8%	5.2-5.8%	🎓 PROMOTED
Return on equity	16-20%	21-24%	🎓 PROMOTED
AUM growth	20-25%	20-25%	RETAINED
Credit cost	3-4%	3-4%	RETAINED

Funding is ample. The company holds Rs 3,502 crore in cash, Rs 6,759 crore of undrawn sanctions and a Rs 5,925 crore pipeline. In October it signed a foreign loan of about Rs 1,560 crore, replacing a maturing facility of about Rs 1,780 crore at a lower rate. Average borrowing cost eased to 9.1%, though marginal cost rose to 9.1% from 8.8% on longer-tenor bonds.

Why the target fell while the business improved

ICICI Securities lifted its estimates, now forecasting net profit of Rs 1,944 crore in FY27 and Rs 2,233 crore in FY28. But it cut its multiple to about 1.9 times FY28 estimated book value, reflecting the turn in the rate cycle and weather-related asset-quality risk. That math yields the Rs 1,400 target, down 22% from Rs 1,800. The chart shows why the cheaper multiple still leaves room: adjusted book value per share rises every year, so the price-to-book at today's Rs 1,027 compresses fast.

FY25

ABV Rs 407.5 · 2.5x

FY26

ABV Rs 470.1 · 2.2x

FY27E

ABV Rs 590.0 · 1.7x

FY28E

ABV Rs 725.2 · 1.4x

Green bars rise with adjusted book value per share (scale Rs 800). Grey bars hang from the top with price-to-ABV at the current Rs 1,027 (scale 3x).

Rs crore	FY25	FY26	FY27E	FY28E
Net interest income	3,599	3,864	4,837	5,799
Pre-provision profit	2,638	2,809	3,640	4,350
Net profit	532	777	1,944	2,233
EPS (Rs)	33.3	48.5	121.4	139.4
GNPA	4.8%	3.2%	1.7%	1.5%
RoA / RoE	1.9% / 7.9%	2.6% / 10.5%	5.5% / 22.1%	5.2% / 20.5%
P/E at CMP	-	-	8.5x	7.4x

Ownership is shifting as well. Promoter holding slipped to 63.8% in September from 66.2% in June, while foreign investors rose to 14.7%. Management says promoters remain in talks with a strategic investor at the group level, with progress expected over the next couple of quarters.

Editor's note

1. The report gives two staff counts: 21,981 on its cover page and 22,677 in the call highlights.

2. The quarterly table cites collection efficiency of 98%, while the call notes cite X-bucket efficiency of 99.71%. The report does not define the first measure.

3. The printed FY25 and FY26 valuation multiples (P/E 46.7x and 32.1x; P/ABV 3.8x and 3.3x) imply a share price of about Rs 1,556, not the Rs 1,027 used for the forward years. At Rs 1,027, FY26 P/E is about 21.2x and P/ABV about 2.2x. TopNews has left those cells blank and used recomputed ratios in the chart.

4. The cover page says asset quality "strengthened" with PAR 15+ accretion at 26 basis points, but the call notes show that accretion rose from 16 basis points in June.

Risks to the call

ICICI Securities · Growth

AUM growth could fall short amid macro or climatic uncertainty.

ICICI Securities · Delinquencies

Volatile repayments could push credit cost higher and cap the expansion in return on assets.

TopNews · Pricing squeeze

Management earlier signalled cumulative rate cuts of 100 to 150 basis points. Deeper cuts, with marginal borrowing cost already rising, could erode the margin gains.

The first two risks are printed by ICICI Securities. The third is a TopNews addition drawn from the report's margin commentary.

Sources

ICICI Securities (ICICI Direct Research), "CreditAccess Grameen Ltd: Improving asset quality supports profitability outlook," result update dated Oct. 25, 2026; analysts Vishal Narnolia and Nivedita Choudhary. Company data as cited by the brokerage. Dollar loans converted at about Rs 89 to the dollar. The 1.9x multiple applied to FY28E book value of Rs 750.3 gives about Rs 1,426, and to adjusted book value of Rs 725.2 about Rs 1,378; the brokerage rounds to Rs 1,400. The buckets, graduation path and book-value chart are TopNews presentations of the brokerage's printed figures.

Disclaimer: This TopNews Story is based on a third-party brokerage report and is for information only. It is not investment advice. Stock market investments are subject to market risks. Readers should consult a registered financial adviser before making any investment decision.

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