CLSA raises CreditAccess target to ₹1,600 after Q2 beat, maintains hold rating
Published on 29/10/2025 08:58 AM
CLSA raises CreditAccess target to ₹1,600 after Q2 beat, maintains hold ratingMargins widened by about 50 basis points quarter-on-quarter, supported by higher lending yields and a lower cost of funds. CLSA expects margin gains to continue in the coming quarters.By CNBCTV18.com October 29, 2025, 8:58:49 AM IST (Published)2 Min ReadCreditAccess Grameen’s July-September quarter (Q2FY26) numbers were better than expected, but the near-term outlook remains mixed, according to CLSA. The brokerage maintained its hold rating on the stock and raised its target price to ₹1,600 per share.
The company reported a profit after tax (PAT) of ₹130 crore in the second quarter, which was 52% higher than CLSA’s estimates. The earnings surprise was largely driven by lower provisioning expenses and higher other income.
Operating metrics showed some improvement. Margins widened by about 50 basis points quarter-on-quarter, supported by higher lending yields and a lower cost of funds. CLSA expects margin gains to continue in the coming quarters.
However, the company increased its credit cost guidance for both the current year and the next in its post earnings conference call. Management now expects credit costs to be 70–100 basis points higher than its earlier projection of 5.5-6%, due to a rise in overdue accounts following heavy rainfall in some regions.
Asset quality trends showed some improvement sequentially, but the overdues remain above internal expectations.
Growth picked up during the quarter. Disbursements almost doubled quarter-on-quarter, though assets under management (AUM) were broadly flat. Management expects AUM growth to improve to 14–15% by the March quarter and said it is on track for 20% growth in the second half of FY26.
For the full year, growth is likely to be at the lower end of the company’s earlier 14–18% guidance range. The management also expects return on assets to move toward 4.5% in FY27.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!Tags