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'Add' CreditAccess Grameen Shares Says Yes Securities Post Q1 Results; Sees 15% Upside

Along with further improvement in visibility of growth and profitability, CreditAccess' current valuation can re-rate, adds the brokerages.

<div class="paragraphs"><p>Due to higher accelerated write-offs of Rs 6.9 billion, the overall credit cost was elevated at annualized 9% of on-book loans.</p><p>&nbsp;(Photo: Vijay Sartape/NDTV Profit)</p></div>
Due to higher accelerated write-offs of Rs 6.9 billion, the overall credit cost was elevated at annualized 9% of on-book loans.

 (Photo: Vijay Sartape/NDTV Profit)

Notwithstanding lingering issues in KTK and some disturbance in Tamil Nadu, CreditAccess’ new PAR addition in Q1 FY26 was lower at 170 bps versus 210 bps in Q4 FY25. Addition in Stage-III (largely 60+ dpd) was also lesser at ~Rs 6.8 billion vs ~Rs 7.6 billion in preceding quarter.

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Yes Securities Report

We largely retain our FY26/27 earnings estimates and our view that CreditAccess Grameen Ltd. will be amongst a handful of microfinance players depicting linear cyclical recovery. Further, CreditAccess Grameen would revert to trend return on equities quicker than others due to upfront stress recognition and provisioning.

While guardrails entail stringent controls, the beneficial competitive landscape and availability of funding would drive growth for the company in group loans.

Retail Finance would grow much faster leveraging the large customer and distribution franchise. Along with further improvement in visibility of growth and profitability, the current valuation can re-rate.

The stock trades at 12.6x P/E and 2.2x price/adjusted book value on FY27 estimates.

Click on the attachment to read the full report:

Yes Securities CreditAccess Grameen Ltd Q1FY26.pdf
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