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Informist, Monday, Jan. 19, 2026

 

By Shumaila Firoz 

 

Mumbai - CreditAccess Grameen Ltd.'s net profit for the December quarter is expected to rise sharply on quarter, supported primarily by a steep sequential decline in credit costs and easing stress in its microfinance portfolio, according to analysts tracking the company. Brokerages expect asset quality improvement and modest expansion in net interest margin to support earnings recovery.

 

CreditAccess Grameen is expected to report a net profit of INR 2.26 billion for the December quarter, according to the average of estimates from six brokerages. On a year-on-year basis, the lender's performance is expected to swing to a profit from a loss of INR 995.2 million, supported mainly by a sharp decline in credit costs. The net profit is expected to jump up nearly 80% from the net profit of INR 1.26 billion in the trailing quarter.

 

The company's net interest income for the quarter is estimated at INR 10.02 billion, up 7% from INR 9.35 billion in the trailing quarter. Year on year, the net interest income is seen up over 16%.

 

The highest estimate for net profit is INR 2.61 billion by Motilal Oswal Financial Services Ltd., while the lowest estimate is INR 1.46 billion from Elara Securities Ltd. The highest estimate for net interest income is INR 10.39 billion by JM Financial Institutional Securities Pvt. Ltd. while the lowest estimate is INR 9.33 billion by Elara.

 

Brokerages expect the company's net interest margin to improve strongly during the quarter. Motilal Oswal expects the net interest margin to expand by around 60 basis points on quarter, as the lender's cost of funds is likely to decrease after the Reserve Bank of India cut its key repo rate in December and also due to a decline in credit cost.

 

The lender's credit cost is projected to decline sharply on a sequential basis, brokerages said, reflecting reduced stress in its microfinance portfolio. ICICI Securities Ltd. estimates the credit cost at 5.4%, which it said would drive the rise in the net profit for the quarter. "Credit costs are projected to decline (around) 280bp QoQ to (around) 5.3%." Motilal Oswal said. JM financial estimates the company's credit cost to decline to 6.7% in the December quarter from 8.7% in the previous quarter.

 

YES Securities (India) Ltd. said CreditAccess Grameen is among the lenders whose earnings performance is expected to beat the Street's expectations in the December quarter. The brokerage said disbursement momentum and asset quality of the company are among the most positive in the sector. In the trailing quarter, the company's gross non-performing asset ratio was 3.65% and the net non-performing asset ratio was 1.26%.

 

The company's loan growth is expected to have been modest in the December quarter. Motilal Oswal expects CreditAccess Grameen's gross loan portfolio to grow around 7% on year and 3% sequentially in the December quarter. The company is scheduled to announced the Oct-Dec earnings on Tuesday.

 

Monday, shares of CreditAccess Grameen ended at INR 1,282.10 on the National Stock Exchange, down 1.3%. The stock has declined over 13% since the company announced its September quarter earnings on Oct. 28.

 

Of the seven brokerage reports on the company available with Informist, six have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 1,573. This is nearly 23% higher than the current market price. One brokerage has a 'hold' or equivalent recommendation on the stock with an average target price of INR 1,470.

 

Following are the December quarter earnings estimates for CreditAccess Grameen from six brokerage firms in the descending order of the estimate of net profit in INR billion: 

 

Brokerage	Net Interest Income	Net Profit
Motilal Oswal Financial Services Ltd.	9.86	2.61
ICICI Securities Ltd.	10.32	2.50
YES Securities (India) Ltd.	10.31	2.42
Emkay Global Financial Services Ltd.	9.89	2.37
JM Financial Institutional Securities Pvt. Ltd.	10.39	2.21
Elara securities (India) Pvt. Ltd.	9.33	1.46
Average	10.02	2.26

End  

 

Edited by Ashish Shirke

 

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