CreditAccess Grameen Limited (NSE: CREDITACC) is India’s largest non-banking financial company-microfinance institution (NBFC-MFI), primarily focused on providing micro-loans to rural households through a joint liability group-based lending model. The company targets low-income female borrowers and is increasingly diversifying its end markets through a retail finance portfolio that recently crossed the ₹2,500 crore mark.
Current Stock Price
₹1,248 (as of January 20, 2026 close).
Valuation
The stock currently trades at 2.2 times FY27 price-to-book value (P/BV). Institutional analysts suggest this valuation does not fully capture projected improvements in return on assets (RoA) and return on equity (RoE), with target valuations cited at 2.3 times FY28E P/BV.
Resilience & Recovery
CreditAccess Grameen reported a significant financial turnaround in the third quarter, posting a consolidated net profit of ₹252 crore, compared with a loss of ₹100 crore in the same period last year. This recovery was driven by a 13% year-on-year increase in net interest income (NII) to ₹976 crore and a sharp reduction in credit costs to 5.6%. Management guidance remains robust, targeting 20% growth in assets under management (AUM) and a return on assets of 4-4.5% for FY27, supported by a 32.9% increase in disbursements during the first half of the year.
The company has demonstrated resilience against macro-level and sector-specific pressures, including industry-wide challenges that impacted asset quality in previous quarters. While the lender faces cyclical risks; notably a recent uptick in the gross non-performing assets (NPA) ratio to 4.04% from 3.65% and seasonal fluctuations in collection efficiency; management indicates that stress formation in key geographies like Karnataka has normalized. These cyclical headwinds are countered by structural strengths, including a branch network that expanded 8.8% to 2,209 locations and a deliberate shift toward retail finance, which is expected to comprise over 15% of the AUM mix.
Competitive dynamics within the microfinance sector favor CreditAccess Grameen’s stabilized operating efficiency and aggressive borrower acquisition. The firm added 2.2 lakh new borrowers in the most recent quarter, with 39% being new-to-credit customers, enhancing its unique borrower share to 41%. High provision coverage; currently at 70% for Stage 3 loans provides a buffer against further credit costs as the company executes its nine-month write-off policy. Analysts maintain that the recent correction in stock price offers an attractive entry point as the company transitions from a period of provision-led losses to normalized profitability and growth
Factors Central to Financial Turnaround
• Significant Decline in Credit Costs: The most critical factor was the drop in loan provisions, which fell to ₹343 crore from ₹752 crore in the year-ago quarter. This led to a sharp decline in credit costs to 5.6%, providing a substantial boost to the bottom line.
• Strong Growth in Net Interest Income (NII): The company’s NII grew 13% year-on-year to ₹976 crore, up from ₹863 crore. This reflected improved operating performance and sustained business momentum.
• Operational Efficiency and Operating Profit: Pre-provision operating profit increased by 9.2% year-on-year to ₹681 crore. Management indicated that the firm has reverted to its normalized operational efficiency following a period of industry-wide challenges.
• Normalization of Asset Quality: While the gross non-performing assets (NPA) ratio edged up to 4.04%, management noted that stress formation in key operating geographies, such as Karnataka, has stabilized. This normalization allowed the company to refocus on growth with increased confidence.
• Improved Collection Efficiency: Collection efficiency, including arrears, rose to 94.9% in September 2025, compared to 94.1% in June 2025.
• Expansion of Borrower Base and Portfolio Diversification: The company added 2.2 lakh new borrowers in the quarter ending September, with 39% being new-to-credit customers. Furthermore, its retail finance portfolio successfully crossed the ₹2,500 crore mark, illustrating a strategic diversification beyond traditional micro-loans.
• Infrastructure Growth: Structural support for this turnaround included an 8.8% expansion of the branch network to 2,209 locations and a 10.9% increase in the employee base.