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CreditAccess Grameen's lowest share price target implies a 42% downside potentialOf the 18 analysts that have coverage on CreditAccess Grameen, 12 have a "buy" rating, four have a "hold" rating and two have a "sell" rating.By Shloka Badkar   May 19, 2025, 10:25:22 AM IST (Published)3 Min ReadShares of CreditAccess Grameen Ltd. declined as much as 6% on Monday, May 19, as analysts have projected the stock to fall over 42% from current levels.

Goldman Sachs has a "sell" rating on the stock with a price target of ₹700 per share. This is the lowest price target on the street for the stock.

CLSA has downgraded its rating on the stock to "underperform" with a price target of ₹1,050 per share, implying a potential downside of 12.5% from its last closing price of ₹1,200 apiece.

Meanwhile, Nomura has upgraded the stock to "neutral" and raised its price target to ₹1,090 per share, which still implies a 9% downside potential from its previous closing price.

Goldman Sachs

CreditAccess Grameen's pre-provision operating profit declined by 7% from the previous year but was 6% more than Goldman Sachs' estimates. It was driven by sharply lower employee operating expenses.

The company's credit costs remained elevated around 9.85%, which led to a decline in profit after tax (PAT) of around 88% from the previous fiscal.

For the financial year 2025, the company reported asset under management (AUM) de-growth of 3% from the previous year and return on assets of 1.9% compared to guidance of 7-8% growth and 2.3%-2.4% return on assets.

CLSA

The company reported a ₹47 crore net profit in the fourth quarter, which was dragged down by a 9% annualised credit cost.

The brokerage expects CreditAccess Grameen's credit costs to remain elevated between 5.5% to 6% due to challenges in Karnataka, over leveraging issues and MFIN guard rails. The company's credit costs in financial year 2025 stood at 7.3%.

As per the company's management, there will be another six months of stress.

Steady state growth guidance is 13%-15% for the microfinance (MFI) segment and 18% for its overall book, supported by strong growth in retail finance, CLSA said.

The company's return on equity should recover to 11.9% in FY26 and 18% in FY27-28, it added.

The recent rally in stock in unjustified, with a likely a tepid year, CLSA said. The stock is still up 27% so far in 2025.

Nomura

Nomura said CreditAccess Grameen reported a PAT of ₹47.2 crore in the fourth quarter, compared to a loss of ₹99.5 crore in the previous quarter, supported by a higher net interest income (NII), which increased 3% sequentially and was 5% above estimates.

The company emphasised on reversing delinquency trends, particularly in the second half of FY26, guiding for 14%-18% gross loan portfolio growth and 12%-13% Return on Equity for this fiscal, the brokerage said.

Nomura said the company continued to guide for elevated credit costs in FY26 in the 5.5% to 6% range due to three factors:

Elevated credit costs in Karnataka

Residual credit cost on account of write-off of existing delinquencies

A recovery in the industry from the existent asset quality stress and alignment with MFIN guard rails 2.0.

However, the brokerage sees stress clean-up pointing towards healthier growth and profitability trends going ahead for the company.

Of the 18 analysts that have coverage on the stock, 12 have a "buy" rating, four have a "hold" rating and two have a "sell" rating.

Shares of CreditAccess Grameen declined 5.7% to hit an intraday low of ₹1,136 per share. The stock has gained 28.5% in the last six months.

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