CreditAccess shares zoom 10% after HSBC, CLSA upgrade
Shares of CreditAccess Grameen rallied as much as 10.5% to their day’s high of Rs 1,369 on the BSE on Wednesday after foreign brokerages HSBC and CLSA upgraded the stock to 'Buy' following its December quarter earnings.
HSBC has assigned a target price of Rs 1,630, forecasting a 31% upside from the last closing price of Rs 1,240 per share on the BSE. The brokerage said the Q3FY26 performance was driven by margin expansion and a significant decline in provisions. HSBC expects a stronger performance in FY27 than what current guidance implies and has increased its FY26–FY28E EPS estimates by 7–13%.
CLSA has pegged the target price at Rs 1,450, implying an upside of 17% from the current market levels, citing a sharp improvement in asset quality trends in its core microfinance portfolio. The brokerage highlighted the introduction of new products in retail finance and expects the non-MFI segment to account for more than 15% of the overall mix in FY26. CLSA also noted that the company is set to provide details of its redesigned business model and strategic direction in the next quarter.
CreditAccess Q3 performance snapshot
The company’s net profit came in at Rs 252 crore, marking a massive increase of 153% from Rs 99.50 crore reported in the corresponding quarter of the previous year, the company said in a regulatory filing. This translates into a return on assets of 3.5% and a return on equity of 13.8%. The decline in new PAR accretion led to a 54.4% YoY reduction in credit costs to Rs 342.6 crore.
Assets under management increased 7.1% year-on-year to Rs 26,566 crore from Rs 24,810 crore. Disbursements also recorded healthy growth, rising 13.4% YoY to Rs 5,767 crore from Rs 5,085 crore. During the period, the company added 2.06 lakh new borrowers, with 39% of these customers classified as new-to-credit.
Liquidity remained robust, with cash, cash equivalents and investments amounting to Rs 2,397.4 crore, representing 8.4% of total assets. The company maintained a healthy capital position with a capital adequacy ratio (CRAR) of 26.4%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
HSBC has assigned a target price of Rs 1,630, forecasting a 31% upside from the last closing price of Rs 1,240 per share on the BSE. The brokerage said the Q3FY26 performance was driven by margin expansion and a significant decline in provisions. HSBC expects a stronger performance in FY27 than what current guidance implies and has increased its FY26–FY28E EPS estimates by 7–13%.
CLSA has pegged the target price at Rs 1,450, implying an upside of 17% from the current market levels, citing a sharp improvement in asset quality trends in its core microfinance portfolio. The brokerage highlighted the introduction of new products in retail finance and expects the non-MFI segment to account for more than 15% of the overall mix in FY26. CLSA also noted that the company is set to provide details of its redesigned business model and strategic direction in the next quarter.
CreditAccess Q3 performance snapshot
The company’s net profit came in at Rs 252 crore, marking a massive increase of 153% from Rs 99.50 crore reported in the corresponding quarter of the previous year, the company said in a regulatory filing. This translates into a return on assets of 3.5% and a return on equity of 13.8%. The decline in new PAR accretion led to a 54.4% YoY reduction in credit costs to Rs 342.6 crore.
Assets under management increased 7.1% year-on-year to Rs 26,566 crore from Rs 24,810 crore. Disbursements also recorded healthy growth, rising 13.4% YoY to Rs 5,767 crore from Rs 5,085 crore. During the period, the company added 2.06 lakh new borrowers, with 39% of these customers classified as new-to-credit.
Liquidity remained robust, with cash, cash equivalents and investments amounting to Rs 2,397.4 crore, representing 8.4% of total assets. The company maintained a healthy capital position with a capital adequacy ratio (CRAR) of 26.4%.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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