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Informist, Friday, Oct. 24, 2025

 

By Rati Chaphekar

 

MUMBAI – CreditAccess Grameen Ltd. is expected to report a sharp fall in net profit for the September quarter compared to the same quarter a year ago owing to sluggish growth in assets under management. The revenue of the company is also expected to remain flat on year due to implementation of the new guardrail 2.0 guidelines, which have resulted in a higher loan rejection rate for the microfinance lender.

 

The lender is expected to report a net profit of INR 973 million for the September quarter, down 48% on year but up nearly 62% on quarter, according to the average of estimates from seven brokerages. The lowest estimate for net profit is INR 787 million from Anand Rathi Share and Stock Brokers Ltd. and the highest is INR 1.34 billion from Emkay Global Financial Services Ltd.

 

The company is expected to post a net interest income of INR 9.33 billion for the quarter, flat on year but up 3% on quarter. The lowest revenue estimate of INR 8.14 billion is from Elara Securities (India) Pvt. Ltd. and the highest estimate of INR 9.93 billion is from YES Securities (India) Ltd.

 

The overall assets under management of the microfinance institution are expected to have remained unchanged in the September quarter, Motilal Oswal Financial Services Ltd. said. The assets under management are expected to rise a mere 1% on quarter, ICICI Securities Ltd. said. "This is likely on account of implementation of guardrail 2.0, which is likely to result in higher loan rejection rate and hence keep disbursements muted in Q2FY26 (Jul-Sept) as well," the brokerage said.

 

Guardrail 2.0 are guidelines framed by the microfinance institutions network, a self-regulatory organisation recognised by the Reserve Bank of India, to promote responsible lending, mitigate risks, and address concerns about borrower indebtedness in the microfinance sector. These guidelines were announced in November and came into effect from January.

 

The non-banking financial institution had reported an unexpected plunge of nearly 85% in its net profit for the June quarter, primarily due to a sharp rise in impairment costs on its financial assets. Total expenses for the quarter had jumped 41% on year to INR 13.83 billion, led by a surge of more than 200% in impairment charges on financial instruments, which climbed to INR 5.72 billion.

 

CreditAccess Grameen is a non-banking finance company that caters to 4.25 million women borrowers nationwide. Founded in 1999 as a non-governmental organisation in south Bengaluru, it has evolved into a publicly listed microfinance lender that mainly offers micro-loans to women entrepreneurs in rural areas. The company's mission focuses on promoting rural development by empowering women with financial assistance for income generation, health care, education, and business growth.

 

The credit costs for the microfinance industry as a whole are expected to have risen in the reporting quarter with the annualised credit cost of CreditAccess Grameen at 8%, Motilal Oswal said. ICICI Securities said the microfinance lender will have a lower credit cost but did not provide an estimate for the expected credit cost.

 

CreditAccess Grameen will announce its quarterly earnings on Oct 28. Of the 13 brokerage recommendations on the company available with Informist, 12 have a "buy" rating with an average target price of INR 1,394 while one has a "hold" rating. Friday, shares of Creditaccess Grameen ended almost 7% higher at INR 1,422.50 on the National Stock Exchange. The stock has risen 5% since Jul. 22, when the company had announced its June quarter earnings.

 

Following are the Jul-Sept earnings estimates, in INR million, for Creditaccess Grameen from seven brokerage firms, in descending order of the net profit estimate:

 

Brokerage	Revenue	Net profit
Emkay Global Financial Services Ltd.	9,244	1,339
Elara Securities (India) Pvt Ltd.	8,140	1,029
YES Securities (India) Ltd.	9,934	931
ICICI Securities Ltd.	9,884	924
Motilal Oswal Financial Services Ltd.	9,264	912
JM Financial Institutional Securities Pvt Ltd.	9,907	886
Anand Rathi Share and Stock Brokers Ltd.	8,969	787
Average	9,334.57	972.57

 

End

 

Edited by Rajeev Pai

 

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