CreditAccess Grameen Pivoting From Stress To Stability, Says Motilal Oswal Maintaining 'Buy'

The updated regulatory framework, particularly the revised qualifying asset criteria, offers a clear opportunity for CreditAccess Grameen to invest in and expand its nonqualifying asset portfolio. This will enable the company to strengthen its microfinance foundation while building a more resilient and diversified balance sheet, paving the way for long-term value creation.

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Motilal Oswal Report

CreditAccess Grameen Ltd. has successfully navigated a period of industry-wide challenges, demonstrating remarkable resilience and a return to normal operational efficiency. New stress formation (ex-Karnataka) has largely normalized, supported by robust internal processes such as rigorous daily collection monitoring, detailed audit reports, and consistent tracking of center attendance.

While some residual stress from recent headwinds is still being managed, the core business is now operating as expected, reinforcing confidence in the company’s fundamental strength.

The updated regulatory framework, particularly the revised qualifying asset criteria, offers a clear opportunity for CreditAccess Grameen to invest in and expand its nonqualifying asset portfolio. This will enable the company to strengthen its microfinance foundation while building a more resilient and diversified balance sheet, paving the way for long-term value creation.

The upcoming three months present an opportunity to separate high-quality franchises from weaker ones, with performance divergence across the MFI sector expected to be increasingly evident.

We expect CreditAccess Grameen to deliver AUM/PAT CAGR of ~18%/75% over FY25-FY27 and RoA/RoE of 4.9%/19% in FY27. Reiterate our Buy rating on the stock with a target price of Rs 1,485 (based on 2.5x Mar’27E P/BV)

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