Motilal Oswal Reiterates Buy Recommendation for CreditAccess Grameen, Sets Target Price at Rs 1600

CreditAccess Grameen (CREDAG) Research Report

Improving Operating Momentum and Resilient Portfolio Retention

CreditAccess Grameen (CREDAG) is emerging from the recent MFI stress phase with improving operating momentum, resilient portfolio retention, and a structurally stronger business mix. The normalization of asset quality trends, combined with retail finance-led diversification and improving spreads, positions the company for a sharp earnings recovery in FY27–28E.

Key Highlights

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• 70–80% of disbursements extended to existing customers, reflecting strong borrower stickiness
• Retail finance share in AUM has risen from 11% to 14% in Dec'25
• Management aims to achieve a balanced secured–unsecured mix within retail finance, strengthening portfolio diversification

Outlook

We model an AUM/NII/PPoP/PAT CAGR of 21%/16%/13%/50% over FY26–28E

• RoA/RoE expected to improve to 4.5%/17.5% by FY28E
• 2.3x FY27E P/BV valuation, with a BUY rating and Target Price of INR1,600 (premised on 2.4x Dec'27E BVPS)