Why CreditAccess Grameen shares rallied 7% today; target prices for CREDAG post Q3 results
JM Financial, which upgraded the stock to 'Buy', said CreditAccess Grameen's Q3 profit came in 14 per cent higher than its expectations, driven by sharp decline in credit cost to 5.6 per cent.
- Jan 21, 2026,
- Updated Jan 21, 2026 9:40 AM IST
Shares of CreditAccess Grameen Ltd (CREDAG) rallied 7 per cent in Wednesday's trade as a couple of brokerage felt a full recovery was underway and that the sharp correction on the counter offers attractive entry points. The CreditAccess Grameen management has guided for 20 per cent AUM growth, largely led by increase in retail finance, credit cost of 4-4.5 per cent and return on asset (RoA) of 4-4.5 per cent in FY27.
JM Financial, which upgraded the stock to 'Buy', said CreditAccess Grameen's Q3 profit came in 14 per cent higher than its expectations, driven by a sharp decline in credit cost to 5.6 per cent.
"Given 11 per cent correction in stock price in last 3 months, current valuation of 1.9 times FY28 P/BV doesn’t capture this ROA/ROE improvement. We expect AUM CAGR of 18 per cent over FY26-28E and average ROA of 4.5 per cent/19 per cent over FY27-28E. We maintain our EPS estimates and target at 1,530 and upgrade stock to Buy (from Add earlier), valuing it at 2.3 times FY28E P/BV," it said.
MOFSL said CreditAccess Grameen has successfully navigated a period of industry-wide challenges, demonstrating remarkable resilience, and has reverted to its normalised operational efficiency. New stress formation, including in Karnataka, has normalised, supported by robust internal processes, stable PAR bucket rollforward rates, and improvement in the PAR 15+ accretion rate.
"With structural levers such as branch network expansion and strengthening collection efficiency across key geographies firmly in motion, it is well-positioned to deliver a strong improvement in loan growth and profitability from FY27 onward," it said.
MOFSL said CreditAccess Grameen trades at 2.2 times FY27 price to book value. With a strong capital position, MOFSL feels the NBFC will embark on a strong loan growth trajectory with further normalisation in its delinquency trends. It reiterated its 'Buy' rating with a revised target of Rs 1,580.
The company management suggested that write-offs in Q4 will pertain to delinquencies that happened in Q1FY26, given the company’s 9-month write-off policy. CreditAccess Grameen already has a 70 per cent PCR on Stage 3 loans, and only the residual amount will have to be provided for when loans are written-off. Retail finance is expected to grow faster than earlier anticipated and make up 15 per cent-plus in the AUM mix.
Shares of CreditAccess Grameen Ltd (CREDAG) rallied 7 per cent in Wednesday's trade as a couple of brokerage felt a full recovery was underway and that the sharp correction on the counter offers attractive entry points. The CreditAccess Grameen management has guided for 20 per cent AUM growth, largely led by increase in retail finance, credit cost of 4-4.5 per cent and return on asset (RoA) of 4-4.5 per cent in FY27.
JM Financial, which upgraded the stock to 'Buy', said CreditAccess Grameen's Q3 profit came in 14 per cent higher than its expectations, driven by a sharp decline in credit cost to 5.6 per cent.
"Given 11 per cent correction in stock price in last 3 months, current valuation of 1.9 times FY28 P/BV doesn’t capture this ROA/ROE improvement. We expect AUM CAGR of 18 per cent over FY26-28E and average ROA of 4.5 per cent/19 per cent over FY27-28E. We maintain our EPS estimates and target at 1,530 and upgrade stock to Buy (from Add earlier), valuing it at 2.3 times FY28E P/BV," it said.
MOFSL said CreditAccess Grameen has successfully navigated a period of industry-wide challenges, demonstrating remarkable resilience, and has reverted to its normalised operational efficiency. New stress formation, including in Karnataka, has normalised, supported by robust internal processes, stable PAR bucket rollforward rates, and improvement in the PAR 15+ accretion rate.
"With structural levers such as branch network expansion and strengthening collection efficiency across key geographies firmly in motion, it is well-positioned to deliver a strong improvement in loan growth and profitability from FY27 onward," it said.
MOFSL said CreditAccess Grameen trades at 2.2 times FY27 price to book value. With a strong capital position, MOFSL feels the NBFC will embark on a strong loan growth trajectory with further normalisation in its delinquency trends. It reiterated its 'Buy' rating with a revised target of Rs 1,580.
The company management suggested that write-offs in Q4 will pertain to delinquencies that happened in Q1FY26, given the company’s 9-month write-off policy. CreditAccess Grameen already has a 70 per cent PCR on Stage 3 loans, and only the residual amount will have to be provided for when loans are written-off. Retail finance is expected to grow faster than earlier anticipated and make up 15 per cent-plus in the AUM mix.