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Hidden Gem: CreditAccess Grameen (CMP - ₹ 1,411, Mcap - ₹ 22,595 crore, Buy, Target - ₹1,600)

ICICIdirect Research 23 Jan 2026 DISCLAIMER

CreditAccess Grameen reported a strong sequential recovery in Q3FY26, driven by margin expansion and lower credit cost.
AUM grew 2.6% QoQ (7.1% YoY) as disbursements rose 13.4% YoY to ₹5767 crore, with notable recovery in Karnataka. The non-MFI portfolio expanded to 14% of AUM, led by growth in unsecured business loans and wider branch reach. NIM rose 60 bps QoQ to 13.9% on higher yields (21%) and lower CoF (9.4%), supporting stronger profitability.
Credit cost moderated by 54.4% YoY aiding RoA improvement to 3.5%, while asset quality strengthened with PAR 0+ (Portfolio at Risk) at 4.4% and PAR 90+ at 2.9%.
Management’s commentary indicates sustained normalization in collections, particularly in Karnataka, with improving trends also visible across other states. While FY27 credit cost guidance of 4–4.5% remains conservative, improving margins, stable asset quality and rising contribution from retail finance provide visibility on earnings recovery and medium-term growth.

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