CreditAccess Grameen Stock Surges 9% on Strong Q3 Results

Introduction

Shares of CreditAccess Grameen Ltd. surged over 9% on Wednesday, marking their most significant intraday gain since May 2025. The rally was fueled by the company's strong financial performance in the third quarter of fiscal year 2026, which prompted a series of upgrades from leading brokerages. The stock reached an intraday high of ₹1,357.4 per share, snapping a two-day losing streak and significantly outperforming the benchmark Nifty 50 index, which saw a minor decline.

Stellar Q3 Financial Performance

CreditAccess Grameen reported a robust performance for the quarter ending December 2025. The company's consolidated revenue grew by 8% year-on-year (YoY) to ₹1,490 crore, up from ₹1,380 crore in the same period last year. A key highlight was the dramatic improvement in profitability. The firm posted a consolidated net profit of ₹252 crore, a significant turnaround from the net loss of ₹99.5 crore reported in Q3 FY25. This performance translated into a Return on Assets (RoA) of 3.5% and a Return on Equity (RoE) of 13.8%.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) witnessed an exceptional surge of 126% YoY, reaching ₹813 crore compared to ₹360 crore a year ago. This substantial growth led to a sharp expansion in the EBITDA margin, which climbed to 54.5% from 26.07% in the corresponding quarter of the previous fiscal year.

Analyst Upgrades and Positive Outlook

The strong quarterly results led to a wave of positive revisions from market analysts. Multiple brokerage firms upgraded their ratings and price targets for the stock, citing improving fundamentals and a favorable risk-reward profile. Emkay Global upgraded its rating to 'Buy' from 'Add', maintaining a target price of ₹1,550. The firm noted that CreditAccess Grameen is on a firm earnings improvement trajectory, with the Q3 profit beating estimates.

Similarly, JM Financial upgraded the stock to 'Buy', pointing to improving asset quality and a recovery in profitability, while keeping its target price at ₹1,530. HSBC also raised its rating to 'Buy' from 'Hold' and increased its price target significantly to ₹1,630 from ₹1,310, highlighting the margin expansion and a sharp decline in loan loss provisions. Other brokerages, including CLSA, ICICI Securities, and Nomura, also issued 'Buy' ratings. The consensus among analysts is overwhelmingly positive, with 14 out of 17 covering the stock recommending a 'Buy'.

Key Business and Operational Metrics

CreditAccess Grameen's operational performance remained solid during the quarter. The company's Gross Loan Portfolio (GLP) grew by 7.1% YoY to reach ₹26,566 crore. Disbursements also saw a healthy increase of 13.4% YoY, totaling ₹5,767 crore. The company continued to expand its customer base, adding 2.06 lakh new borrowers in Q3, with 39% of them being new to credit. The branch network also expanded, reaching 2,222 branches by the end of December 2025.

Improving Asset Quality

A key driver behind the positive sentiment is the marked improvement in the company's asset quality. The Portfolio-at-Risk (PAR) for the 0-90 day bucket declined, indicating better repayment behavior among borrowers. Overall PAR 0+ decreased sequentially to 4.4% in Q3 from 4.7% in Q2 FY26. Collection efficiency also strengthened, standing at 95.5% in December 2025, an improvement from 94.5% in September 2025. Furthermore, write-offs were reduced to 3.9% from 10.5% in the previous quarter, signaling a moderation in credit costs.

Management Guidance and Future Outlook

The management has provided a confident outlook for the coming fiscal years. They have reiterated their guidance for 20% growth in Assets Under Management (AUM). The company expects its Return on Assets (RoA) to improve further, targeting a range of 4% to 4.5%, up from the current 3.5%. Management also anticipates that Net Interest Margins (NIMs) will trend back towards the 14% to 14.5% range over time. For FY26-27, the company has guided for credit costs to be between 4% and 4.5%.

Stock Performance and Market Context

The stock's 9.3% intraday rally to ₹1,357.4 was its best single-day performance in over eight months. The trading volume was exceptionally high, at 53 times the 30-day average. This performance is notable as it came on a day when the broader market was subdued. Year-to-date, the stock has gained 5%, contrasting with a 3.5% decline in the Nifty 50 benchmark. The company's total market capitalization stood at ₹20,429.19 crore following the rally.

Conclusion

CreditAccess Grameen's impressive 9% stock surge is a direct result of its strong Q3 FY26 performance, characterized by a return to profitability, robust revenue growth, and significant margin expansion. The positive results, coupled with improving asset quality and lower credit costs, have restored confidence among investors and analysts, leading to multiple brokerage upgrades. With a clear growth strategy and positive management guidance, the company appears well-positioned to continue its recovery and deliver sustained value.