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Informist, Tuesday, Oct. 28, 2025

By Simran Rede

MUMBAI – Owing to weaker growth in assets under management and a surge in impairment costs on its financial instruments,  CreditAccess Grameen Ltd.'s bottom line for the September quarter slumped on a year-on-year basis. The top line rose slightly, supported by healthy disbursements and new borrower additions but weighed down by implementation of the new guardrail 2.0 guidelines.

For the quarter under review, the non-banking finance company's net profit plunged over 32% on year to INR 1.26 billion, but it was still higher than the INR 972.57 million expected by the Street. The company's total income for the quarter rose nearly 4% on year to INR 15.09 billion.

Analysts had expected the net interest income to remain flat on year owing to the new guidelines, which have resulted in a higher loan rejection rate for the microfinance lender. On a sequential basis, the company's net profit more than doubled and its total income rose just over 3%.

The lender spent INR 5.26 billion on the impairment of financial instruments, over 25% higher than the amount it had spent on this account a year ago. This expense contributed the highest to the company's total expenses. While its finance costs were down over 1% on year at INR 4.80 billion, employee benefit expenses rose over 16% on year to INR 2.19 billion.

In Jul-Sept, the lender's assets under management increased 3.1% on year to INR 259.04 billion and disbursements rose 33% on year to INR 53.22 billion. It added 220,000 new borrowers during the quarter with 39% being first-time borrowers. The lender's net interest income for the quarter rose nearly 5% on year to INR 9.76 billion.

A key metric to gauge the lender's asset quality, its gross non-performing asset ratio, contracted to 3.65% from 4.70% a quarter ago. The net non-performing asset ratio declined to 1.26% from 1.78% in the previous quarter. The company's liquidity for the quarter was INR 21.76 billion of cash, cash equivalents, and investments, amounting to 7.9% of its total assets.

For the half-year ended Sept. 30, the company's net profit declined over 68% on year to INR 1.86 billion and its total income rose slightly to INR 29.73 billion. The non-bank lender's employee base grew nearly 11% on year to 21,701. Its collection efficiency, including arrears, was 94.9% in September, slightly better than 94.1% in June. Its retail finance portfolio crossed the INR 25 billion mark. Its cost-to-income ratio was 32.5% in the quarter under review, 180 basis points higher on year but 100 bps lower on quarter.

The company had said in its investor presentation accompanying the June quarter earnings that it hopes to keep the cost-to-income ratio at 32-24%, backed by strict control on operating costs, while factoring in the continued efforts on bucket collections and investment in new branch infrastructure for future growth.

"Healthy monsoons, positive agriculture outcomes, and strengthening rural ecosystem trends are expected to drive robust on-ground demand in H2 FY26 (Oct-Mar), resulting in stronger loan portfolio growth and improving asset quality," the company said in its post-earnings presentation.

CreditAccess Grameen's credit cost during the September quarter was INR 5.26 billion, down slightly from INR 5.72 billion a quarter ago. The credit-cost ratio in Jul-Sept was 2.07%, down from 2.23% in Apr-Jun.

The company detailed its earnings Tuesday after market hours. Its shares closed slightly higher on the day at INR 1,477.10 on the National Stock Exchange.   End

Edited by Rajeev Pai

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