Target: ₹1,780
CMP: ₹1556.85
CreditAccess Grameen has emerged stronger from the recent MFI stress, with an improved operating momentum, a more resilient portfolio, and a structurally stronger business mix supported by an increasing focus on retail finance.
The company is strategically transitioning from a traditional MFI into a diversified rural financial services platform aimed at building long-term, household-level financial relationships across income cycles.
With strong disbursement momentum, normalised asset quality trends, retail-led diversification, and improving spreads, CreditAccess is well-positioned to capitalise on the next phase of credit growth.
CreditAccess is transitioning into a more balanced financial services franchise with diversified growth drivers, stronger operational controls, and stabilising credit dynamics. The increasing contribution of retail lending, combined with improved portfolio quality and execution discipline, sets the stage for a more sustainable earnings trajectory over FY27-28E
With retail penetration still low within its large customer base and underwriting performance tracking as expected, the company sees significant headroom for expansion.
We model an AUM/NII/PPoP/PAT CAGR of 21/18/16/59 per cent over FY26–28E, with RoA/RoE improving to about 4.6/18.8 per cent by FY28E.
At 2.6x FY27E P/BV, the stock remains attractively valued. We reiterate our Buy rating with a TP of ₹1,780 (premised on 2.5x FY28E BVPS).