Creditaccess Grameen Limited — Q3 FY26 earnings call

Call held 20 Jan 2026

Management summary

CreditAccess Grameen reported a strong Q3 FY26, marked by significant asset quality normalization with collection efficiency at 99.71% and PAR 15+ accretion dropping to 18 bps. Disbursements grew 13.4% YoY, and NIM expanded by 60 bps QoQ to 13.9%, leading to a doubling of PAT to INR 252 Crore. The company is focused on quality growth, with retail finance contributing increasingly to the portfolio and digital adoption gaining traction.

Highlights

  • X bucket collection efficiency stood at 99.71% in December 2025, indicating strong asset quality.

  • Monthly PAR 15+ accretion declined sharply to 18 bps in December 2025 from 47 bps in September 2025, showing significant improvement.

  • Disbursements for Q3 FY26 reached INR 5,767 Crore, an increase of 13.4% YoY.

  • Net Interest Margin (NIM) increased by 60 bps QoQ to 13.9% in Q3 FY26, driven by lower cost of borrowings.

  • Profit After Tax (PAT) doubled QoQ to INR 252 Crore, with adjusted ROA and ROE at 3.7% and 14.6% respectively.

Concerns

  • The company incurred a one-time impact of INR 18 Crore on account of new labour codes pertaining to employee benefit obligations.

  • Q3 FY26 included accelerated write-offs of INR 181 Crore pertaining to 180 DPD non-paying accounts.

  • Credit cost for Q3 FY26 included an additional INR 59 Crore due to accelerated write-offs and INR 37 Crore due to increased ECL rates.

Key financials

2 periods

Headline

  • Disbursements
    ₹5,767 Cr
    YoY +13.4%
  • Portfolio Growth (QoQ adjusted)
    ₹26,566 Cr
    QoQ +3.3%
  • Net Interest Income
    ₹977 Cr
    YoY +13.4%
  • NIM
    13.9%
    QoQ +0.6%
  • PAT
    ₹252 Cr
    QoQ +100%
  • ROA (Adjusted)
    3.7%
  • ROE (Adjusted)
    14.6%
  • PAR 90
    2.9%
  • GNPA
    4%
  • Net NPA
    1.4%
  • Cost-to-Income Ratio (Adjusted)
    32.3%
  • Average Cost of Borrowings
    9.4%
    QoQ -0.26%

Q3 FY26

  • Credit Cost
    ₹343 Cr

What they filed

Q1 FY27: revenue up 21.9%, net profit up 721.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,453 1,380 1,407 1,463 1,508 +4%1,490 +8%1,597 +14%1,783 +22%
Net profit186 -100 47 60 126 −32%252 +352%340 +623%493 +722%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Portfolio
₹7,559 Cr Total
  • Retail Finance ₹3,780 Cr 50.0%
  • Unnati Loan (Individual Lending) ₹1,700 Cr 22.5%
  • Lighter Individual Lending ₹1,600 Cr 21.2%
  • Mortgage Business Loans ₹266 Cr 3.5%
  • Home Loan Book ₹200 Cr 2.6%
  • Two-Wheeler Book ₹13 Cr 0.2%

Capital allocation

  • Liquidity Undrawn ₹2,397 Cr Ample liquidity at INR 2,397 Crore, amounting to 8.4% of total assets. Funding position strong with INR 3,431 Crore of sanctions in hand and INR 5,781 Crore sanctions in pipeline. Foreign borrowings stood healthy at 24.3%.
    Our foreign borrowings stood healthy at 24.3%, moving closer to the medium-term target of 25-30% by FY28 as we scale our business. We maintain ample liquidity at INR 2,397 Crore, amounting to 8.4% of our total assets. Our funding position remains strong with INR 3,431 Crore of sanctions in hand and INR 5,781 Crore sanctions in pipeline.

Guidance & targets

Credit Cost

  • FY27 Credit Cost Credit Cost · FY27 · Medium confidence 4% to 4.5%
    Our FY27 credit cost guidance of 4% to 4.5% reflects a new PAR 15 accretion rate of 30-35 bps per month.

    — Ganesh Narayanan

  • Monthly PAR 15+ Accretion Rate Credit Cost · Future · Medium confidence 20 to 25 bps

    From 30-35 bps today

    If we are able to demonstrate a monthly PAR 15+ accretion rate of 20 to 25 bps, it would translate in lower credit costs in the future.

    — Ganesh Narayanan

ROA

  • ROA Range ROA · Future · Medium confidence 4.0-4.5%
    From that perspective, we will try to maintain our ROAs in 4.0-4.5% range.

    — Nilesh Dalvi

  • Cross-cycle ROA ROA · Cross cycle · Medium confidence 4%

    From 3.5% today

    we would want to do a cross-cycle ROA of 4% and ROE of around 16%-17% on a cross cycle.

    — Nilesh Dalvi

NIM

  • NIM Range NIM · Next year · Medium confidence 14% to 14.5%
    Maybe for next year, we should see the NIMs anywhere between maybe 14% to 14.5%, in that range for some time because borrowing cost incrementally, we do see dropping by 10 bps every quarter for at least next 2 to 3 quarters, then it should settle down.

    — Nilesh Dalvi

Credit Growth

  • Overall Growth Rate Credit Growth · Every year · Medium confidence at least 20%
    However, we need to do at least a 20% growth every year to reach our medium-term goal.

    — Ganesh Narayanan

  • Microfinance Growth Rate Credit Growth · Early days · Medium confidence early teens (10-12%)
    when we look at microfinance growth, early days, maybe 10% to 12%, so we'll have to finalize our business plans in a few months from now.

    — Ganesh Narayanan

Retail Finance

  • Retail Finance Book Share Retail Finance · FY28 · Medium confidence a little further than 15%

    Previously 15% → a little further than 15%

    We had guided around 15% for FY28, but I think we will inch up a little further to that is what we will.

    — Ganesh Narayanan

Foreign Borrowings

  • Foreign Borrowings Share Foreign Borrowings · FY28 · Medium confidence 25-30%
    Our foreign borrowings stood healthy at 24.3%, moving closer to the medium-term target of 25-30% by FY28 as we scale our business.

    — Ganesh Narayanan

Provisioning

  • Stage 1 Provisioning Provisioning · Fourth quarter · Medium confidence closer to 1.5%
    on the ECL front, as we had indicated in the second quarter call, we should see the Stage 1 provisioning inch up closer to 1.5%. So that should happen in fourth quarter.

    — Nilesh Dalvi

ROE

  • Cross-cycle ROE ROE · Cross cycle · Medium confidence 16%-17%

    From 15% today

    we would want to do a cross-cycle ROA of 4% and ROE of around 16%-17% on a cross cycle.

    — Nilesh Dalvi

What to watch in Q4 FY26

FY27 Credit Cost Guidance Revision

May
Current 4.0-4.5%
Target Potential lower range

Why it matters

A lower credit cost guidance would directly improve profitability outlook and signal sustained asset quality improvement.

We will need to watch it for a few more months. And probably by May, we will try and come back with a clearer guidance.

Risks & concerns

  • Credit discipline in Karnataka state

    medium

    Analyst noted some non-MFI lenders still report issues, but management stated their own strong recovery and return to normal levels.

    Analyst acknowledged

  • Higher rejection rates for new borrowers

    medium

    Approval rates for new borrowers are 55-60% (vs 65% pre-guardrails), requiring more effort for customer acquisition.

    Management acknowledged

  • Bank borrowing lines drying up for NBFC-MFIs

    low

    Management stated their diversification strategy and lower dependency on bank term loans (less than 60%) mitigates this sector-wide concern.

    Analyst downplayed

  • Temporary lull in business momentum

    low

    October 2025 saw a temporary lull due to festive seasonality, but momentum accelerated thereafter.

    Management acknowledged

  • One-time impact of new labour codes

    low

    INR 18 Crore impact on employee benefit obligations in Q3 FY26.

    Management acknowledged

Q&A highlights

7 direct
Asset quality trends in Uttar Pradesh, Bihar, and Madhya Pradesh Direct
all states are trending downwards. It's just a matter of time. And we are consistently seeing that all states are trending downwards. ... those numbers were around 40 bps to 50 bps in UP, Bihar and MP, which is now in the range of 25 bps to 30 bps.

Provides specific data on the improving asset quality in non-core states, indicating a positive trend.

Asked by Shreya Shivani

Credit discipline and recovery in Karnataka Direct
Karnataka spiked up faster. It's come back faster also. So that has also been a behaviour that we've seen because that's a core state. Other states, I think all of them are trending downwards. It's just a matter of time. We'll have to see for the next 3 to 4 months where it settles down. ... Karnataka is coming back very, very strong to our normal levels.

Addresses concerns about a key state, confirming strong recovery and attributing it to the company's deep presence and local connect.

Asked by Shreya Shivani

Challenges in bank borrowings for NBFC-MFIs Direct
our diversification strategy has a very important role to play here. I think we are one of the few NBFCs which has a bank term loan borrowing dependency of less than 60%. And we've been continuously able to access bank funds.

Reassures investors about the company's funding stability and access to bank funds despite broader sector challenges.

Asked by Shreya Shivani

Rejection rates after MFIN guardrails implementation Direct
Rejection rates, definitely, yes, they have gone up. Our current approval rates for new borrowers, so that is new borrower entering CA Grameen is around 55% to 60%. And our existing renewal rates are around 45% to 50%. Just for comparison, this used to be around 65% before the guardrails, right?

Quantifies the impact of regulatory changes on customer acquisition and approval rates, highlighting increased effort needed for growth.

Asked by Abhijeet Tibrewal

Split of growth between MFI and retail finance for FY27 Direct
the growth rate of microfinance would be lingering early teens and the rest of the growth will come from retail, right? And we are also seeing that retail, we are actually outperforming our guidance a little bit. We are growing a little more faster than what we anticipated.

Clarifies the strategic shift in growth drivers, with retail finance expected to contribute more significantly than initially anticipated.

Asked by Abhijeet Tibrewal

Outlook on Q4 credit cost and write-offs Direct
Q4 will have similar credit cost as that of Q3. And it may take some more time to see where it stabilizes around. ... new delinquencies, which came up in the first quarter... will come for write-off in the fourth quarter because we do the write-off after 9 months.

Provides forward-looking insight into credit cost trajectory and the timing of write-offs from earlier delinquencies.

Asked by Abhijeet Tibrewal

Details on the retail finance portfolio composition and ticket sizes Direct
the retail finance portfolio today roughly comprises of around INR 3,780 Crore, of which we have 2 types of unsecured loans extended to customers, graduating customers. One book is our product called Unnati Loan, which is profile of customers are significantly higher income earning... that book is around INR 1,700 Crore. We also have a lighter version of the individual lending product, which is INR 1,600 Crore.

Offers granular detail on the growing retail finance segment, including product types, portfolio sizes, and average ticket sizes.

Asked by Nidhesh

Potential for lower FY27 credit cost guidance Partial
We will need to watch it for a few more months. And probably by May, we will try and come back with a clearer guidance. It held good in December and January. We will have to watch it for a few more months to ensure that the pattern is stable and it is going to remain that. It looks like that, but we will have to come back with some guidance in May.

Indicates management's openness to revising credit cost guidance downwards if current positive trends in PAR accretion continue, which would be a positive for profitability.

Asked by Renish

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance Highlights

CreditAccess Grameen delivered a strong Q3 FY26, reaffirming the stability of its business model. The company achieved an X bucket collection efficiency of 99.71% in December 2025, alongside a sharp decline in monthly PAR 15+ accretion to 18 bps. Disbursements for the quarter grew 13.4% YoY to INR 5,767 Crore, contributing to a sequential portfolio growth of 2.6% to INR 26,566 Crore (3.3% QoQ adjusted for write-offs).

Asset Quality Normalization and MFIN Guardrails Impact

Asset quality trends normalized across all operating geographies, with Karnataka showing a notable recovery to historical levels. The GLP of borrowers with >3 lenders significantly reduced to 4.9% in December 2025 from 25.3% in August 2024, demonstrating the positive impact of MFIN guardrails. PAR 90 stood at 2.94%, GNPA at 4.04%, and Net NPA at 1.36%, predominantly measured at 60 DPD.

Credit Cost and Provisioning Adequacy

The total credit cost for Q3 FY26 was INR 343 Crore, which included INR 59 Crore from accelerated write-offs and INR 37 Crore from increased ECL rates. Excluding these one-time impacts, the non-annualized credit cost was 96 bps. The company maintains robust provisioning, holding 132 bps (INR 335 Crore) over PAR 90 and 280 bps (INR 733 Crore) over IRAC prudential norms, indicating a strong buffer against potential losses.

Profitability and Margin Expansion

Operating profitability strengthened, with Net Interest Income growing 13.4% YoY to INR 977 Crore, supported by a portfolio yield of 21.0%. The average cost of borrowings declined by 26 bps QoQ to 9.4%, leading to a 60 bps QoQ expansion in NIM to 13.9%. Profit After Tax (PAT) doubled QoQ to INR 252 Crore, translating to an adjusted ROA of 3.7% and ROE of 14.6% (excluding a one-time INR 18 Crore labor code impact).

Strategic Growth in Retail Finance and Borrower Acquisition

Borrower acquisition remains a core growth strategy, with 2.1 Lakh new borrowers added in Q3 FY26 and 6.4 Lakh in 9M FY26. The new-to-credit ratio stood at a healthy 39%. The retail finance portfolio continued its steady scale-up, now representing 14.1% of AUM (INR 3,780 Crore), up from 11.1% in Q2, driven by a shift of quality vintage customers towards individual business loans like Unnati (INR 1,700 Crore) and other lighter individual lending products (INR 1,600 Crore).

Digital Adoption and Funding Position

The company's digital platform, Grameen Mahi, has achieved close to 1 million downloads and facilitated 20% digital collections by December 2025, enhancing customer engagement and transparency. CreditAccess Grameen maintained a strong funding position, raising INR 3,917 Crore in Q3 FY26 at a marginal cost of 8.9%. Foreign borrowings constituted 24.3% of the total, moving closer to the medium-term target of 25-30% by FY28, with ample liquidity of INR 2,397 Crore.

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