Creditaccess Grameen Limited — Q4 FY26 earnings call

Call held 8 May 2026

Management summary

CreditAccess Grameen reported a strong Q4 FY26 performance with significant growth in AUM, disbursements, and PAT, alongside margin expansion. The company demonstrated resilience and progress in digital adoption and product diversification. However, full-year credit costs were higher than guided, impacting ROA and ROE, primarily due to increased ECL provisioning and a new model incorporating external event scenarios.

Highlights

  • AUM grew 14.0% YoY and 11.4% QoQ, in line with annual growth guidance.

  • Disbursement in Q4 grew 28.4% YoY and 44.1% QoQ to INR 8,313 Crore, with full year disbursements at INR 24,859 Crore (up 24.1%).

  • PAT grew over 6x YoY and 34.7% QoQ to INR 340 Crore, translating to a Q4 ROA of 4.4% and ROE of 17.8%.

  • NIMs expanded by 35 bps QoQ to 14.2% in Q4, and cost of borrowing declined to 9.2% in Q4, marking a total 60 bps reduction during the year.

  • Digital collections increased YoY from 14% in Q4 FY25 to 22% in Q4 FY26, with 8.4 Lakh borrowers onboarded to Grameen Mahi app in FY26.

Concerns

  • Credit cost for FY26 ended at 6.74% against the guidance of 5.5% to 6.0%.

  • An additional provisioning of INR 39 Crore was made in Q4 due to the West Asia crisis and the new ECL model.

  • Marginal miss on the lower end of FY26 ROA (2.7% vs 2.9%) and ROE (10.7% vs 11.8%) guidance due to higher credit cost.

Key financials

2 periods

Headline

  • PAT
    ₹340 Cr
    YoY +500% QoQ +34.7%
  • AUM Growth
    14%
    QoQ +11.4%
  • NIM
    14.2%
  • ROA
    4.4%
  • ROE
    17.8%

FY26

  • Credit Cost
    6.7%

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.

Guidance & targets

Volume

  • AUM Growth Volume · FY27 · High confidence 20.0-25.0%
    For FY27, we are guiding an AUM growth of 20.0-25.0%

    — Ganesh Narayanan

  • AUM CAGR Volume · FY17 to FY26 · High confidence 28.6%
    FY17 to FY26, we have compounded AUM at 28.6% per annum

    — Ganesh Narayanan

  • Disbursement CAGR Volume · FY17 to FY26 · High confidence 24.7%
    disbursement at 24.7%

    — Ganesh Narayanan

  • MFI Net Growth Volume · FY27 · High confidence 10-12%
    So that is why the net growth in MFI will be 12%.

    — Nilesh Dalvi

  • New Customer Acquisition Volume · FY27 · Medium confidence much, much better than last year

    From 10 Lakh (FY26) today

    Like last year, we acquired close to 10 Lakh customers. So this year, we should be doing much, much better than what we did last year.

    — Nilesh Dalvi

  • New Customer Disbursement Share Volume · Steady-state (FY27 onwards) · Medium confidence 30-40%

    From 20% (FY26) today

    So in a steady-state basis, this should be around maybe 30-40% coming from new customers and balance coming from existing.

    — Ganesh Narayanan

Margin

  • NIM Margin · FY27 · High confidence 12.8-13.2%
    NIM of 12.8-13.2%

    — Ganesh Narayanan

Profitability

  • Cost to Income Ratio Profitability · FY27 · High confidence 33.0-35.0%
    cost to income of 33.0-35.0%

    — Ganesh Narayanan

  • Credit Cost Profitability · FY27 · High confidence 3.0-4.0%
    credit cost of 3.0-4.0%

    — Ganesh Narayanan

  • ROA Profitability · FY27 · High confidence 4.0-4.8%
    ROA of 4.0-4.8%

    — Ganesh Narayanan

  • ROE Profitability · FY27 · High confidence 16.0-20.0%
    and an ROE of 16.0-20.0%.

    — Ganesh Narayanan

  • PAT CAGR Profitability · FY17 to FY26 · High confidence 29.7%
    and PAT at 29.7%.

    — Ganesh Narayanan

  • Cross-cycle ROA Profitability · FY17 to FY26 · High confidence 3.4%
    the cross-cycle ROA stands at 3.4%

    — Ganesh Narayanan

  • Cross-cycle ROE Profitability · FY17 to FY26 · High confidence 13.9%
    and ROE at 13.9%.

    — Ganesh Narayanan

Other

  • Equity Base CAGR Other · FY17 to FY26 · High confidence 32.7%
    Our equity base is compounded at 32.7% from INR 613 Crore to INR 7,842 Crore.

    — Ganesh Narayanan

Market Share

  • Retail Finance Share in AUM Market Share · FY27 end · Medium confidence 24-25%

    From 18.1% (March 2026) today

    So incrementally FY27 or FY27 end, where do we see the share of retail products, let's say, reaching? It should hit somewhere around 24-25%.

    — Ganesh Narayanan

What to watch in Q1 FY27

ECL Provisioning Model Adjustments

Next quarter
Current New model implemented, higher weightage for external events, reviewed quarterly.
Target Any adjustments or further impacts from external factors on ECL provisioning.

Why it matters

Directly impacts credit cost and profitability, especially given the current macroeconomic uncertainties.

So every quarter this committee will convene, and whatever has happened in the previous quarter, or we foresee for the next quarter will be taken into account before making any adjustment.

Risks & concerns

  • West Asia Crisis Impact on Provisioning

    medium

    New ECL model incorporated a higher weightage for major external event scenario, resulting in an additional provisioning of INR 39 Crore in Q4.

    Management acknowledged

  • Global Issues / Macroeconomic Volatility

    medium

    New ECL model captures probable impact of ongoing global issues; inflationary elements built into cost-to-income guidance.

    Management acknowledged

  • Prolonged Disruptions (e.g., fuel/gas supply)

    medium

    Management has budgeted for potential prolonged disruptions, indicating a prepared stance for extreme scenarios.

    Management acknowledged

Q&A highlights

8 direct
Retail Finance Growth Strategy and MFI Evolution Direct
individual finance to graduated microfinance customers is a clear way to progress. And the growth in individual loans will look larger because of the base, like you said, and its initial time period. As we start penetrating into a certain proportion of customers, which we believe roughly around 6-8% of our customer base, we should be able to target, convert to retail finance customers every year.

Clarifies the company's strategy for individual loans as a progression for existing microfinance customers, indicating a calibrated growth approach.

Asked by Abhijit Tibrewal

Credit Cost Guidance for FY27 Direct
We have implemented a new ECL model in this current business, and you may have seen our Stage 1 ECL has gone up to 1.63%. And the current model is more of a forward-looking, wherein we have also taken into account probable impact because of the ongoing global issues. From that perspective, obviously, certain element of that has already been baked in the current ECL.

Explains the rationale behind the wide credit cost guidance band, attributing it to a new forward-looking ECL model and potential global macroeconomic impacts.

Asked by Abhijit Tibrewal

Resilience of Customer Segment to Macroeconomic Shocks Direct
Typically, we have seen our customers segment specifically rural to be more resilient. But we'll have to see what happens in case of prolonged disruptions with respect to the ongoing global scenario. Any temporary issues, I think, we should be able to manage very strongly.

Addresses concerns about the vulnerability of the customer base to external events, highlighting the rural segment's resilience while acknowledging the need to be prepared for prolonged disruptions.

Asked by Abhijit Tibrewal

NIM Guidance vs. Q4 Exit Rate Direct
So from that perspective, if we are able to do a better credit cost this year, compared to FY26, obviously, some of it will flow as a benefit to the customer. So that is where slightly we are budgeting lower NIMs because at the same time, the credit cost will also be lower, and we'll be still doing ROA in our guided range.

Explains the projected NIM compression despite a strong Q4 exit, linking it to passing on credit cost benefits to customers and stabilizing borrowing costs.

Asked by Rajiv Mehta

Cost-to-Income Ratio Guidance Direct
Currently, things are a little volatile. So we have built certain inflationary elements because of the global issues. So if the global issues do not prolong, I mean, if they do not prolong and if there are no cascading effects on the input factors, then we may not see cost-to-income rise.

Provides context for the cost-to-income guidance, indicating that inflationary pressures from global issues are factored in, but potential relief could improve the ratio.

Asked by Rajiv Mehta

Long-Term AUM Growth and MFI vs. Retail Mix Direct
Our assumption probably, if there is enough room and potential, that also could move up. Or in the worst case, we can look at managing the 60-40 in various methods, including securitization, sale of portfolio, whatever you deem it. We can also pick up co-lending as we always maintained.

Clarifies how the company plans to achieve long-term AUM growth while managing regulatory constraints on MFI portfolio mix through diversification and alternative funding strategies.

Asked by Shreya Shivani

MFI Growth Dynamics and Customer Graduation Direct
The new customer acquisition will continue to happen in MFI. But at the same time, what we'll also see is that 6% to 8% of MFI customers, they will get graduated into retail. So that is why the net growth in MFI will be 12%.

Explains how MFI growth will be sustained despite customer graduation to retail products, as graduating customers receive significantly higher exposure in retail.

Asked by Chintan Shah

Product-wise Profitability for Newer Retail Products Direct
except for the mortgage book, all other products are profitable at the product level because if you see for all retail finance products, we are leveraging our group loan ecosystem. ... For mortgage loan products, the standalone retail finance branches, we should see them achieving breakeven as we near maybe INR 800 Crore to INR 1,000 Crore of mortgage book from the retail finance branches.

Provides clarity on the profitability status of diversified retail products, noting that most are profitable by leveraging the MFI ecosystem, with mortgage loans requiring a larger book size to break even.

Asked by Shreepal Doshi

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance Highlights

CreditAccess Grameen reported a robust Q4 FY26, with AUM growing 14.0% YoY and 11.4% QoQ. Disbursements for the quarter reached INR 8,313 Crore, marking a 28.4% YoY and 44.1% QoQ increase, contributing to a full-year disbursement of INR 24,859 Crore (up 24.1%). The company achieved a PAT of INR 340 Crore in Q4, growing over 6x YoY and 34.7% QoQ, leading to a Q4 ROA of 4.4% and ROE of 17.8%. NIMs expanded by 35 bps QoQ to 14.2%, while the cost of borrowing declined by 60 bps YoY to 9.2% in Q4.

Strategic Evolution and Product Diversification

The company is transforming into a rural-focused inclusive financing platform, expanding beyond group-based microfinance into individual business loans, mortgage-backed loans, and 2-wheeler financing. The AUM share of unique group loan borrowers increased to 46.1% from 26.6% in August 2024, while retail finance grew to 18.1% of AUM as of March 2026, up from 5.9% a year ago. This expansion is driven by deepening relationships with its 44 Lakh customer base and graduating vintage borrowers to higher-value products.

Digital Adoption and Technology Advancement

CreditAccess Grameen observed strong digital adoption, with its customer app, Grameen Mahi, onboarding 8.4 Lakh borrowers in FY26, bringing the total active base to 11.2 Lakh customers (25.4% of the borrower base). Digital collections increased YoY from 14% in Q4 FY25 to 22% in Q4 FY26. The technology architecture processes over 30 Lakh transactions per day, and the company is integrating AI into credit decisioning, compliance monitoring, and customer engagement.

Credit Quality and Provisioning

For FY26, the credit cost stood at 6.74%, exceeding the guidance of 5.5% to 6.0%. This included 6.10% due to new PAR and 0.64% due to increased ECL provisioning rates. The company evolved its ECL provisioning model in Q4 to capture past data and forward-looking macroeconomic variables, incorporating a higher weightage for external events like the West Asia crisis, which resulted in an additional provisioning of INR 39 Crore in Q4. Gross NPA (60 DPD) was 3.17%, Net NPA 1.12%, and PAR 90 was 2.28%.

FY27 Guidance and Outlook

For FY27, CreditAccess Grameen guides for an AUM growth of 20.0-25.0%, NIM of 12.8-13.2%, and a cost-to-income ratio of 33.0-35.0%. The credit cost is projected to be 3.0-4.0%, leading to an ROA of 4.0-4.8% and an ROE of 16.0-20.0%. The company expects the share of retail products to reach 24-25% by FY27 end, with MFI net growth around 10-12% despite customer graduation to retail.

Long-Term Vision: Project Shakti

The company's long-term ambition, 'Project Shakti', aims to build a clear leadership position in inclusive finance. Over the past decade (FY17-FY26), AUM compounded at 28.6% and PAT at 29.7%, with a cross-cycle ROA of 3.4% and ROE of 13.9%. The strategy involves deepening market reach, expanding household-level relationships, increasing customer wallet share, and enhancing people, technology, and AI capabilities.

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