CreditAccess Grameen Limited , India's largest Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI), has announced its financial results for the first quarter and provided guidance on its Net Interest Margin (NIM) for FY26.

Q1 Financial Highlights

• Total income stood at ₹1,463.63 crore, down 3.2% year-on-year from ₹1,512.58 crore in the same quarter last year.
• Net Interest Income (NII) decreased slightly to ₹937.00 crore, compared to ₹952.50 crore in the same quarter last year.
• Profit After Tax (PAT) saw a significant decline to ₹60.19 crore, down 84.9% from ₹397.66 crore in the same period last year.
• The company's Gross Loan Portfolio (GLP) remained relatively stable at ₹26,055.00 crore, a marginal decrease of 0.9% year-on-year.

Asset Quality and Provisions

• Gross Non-Performing Assets (GNPA) ratio stood at 4.70%, up from 1.46% in the same quarter last year.
• Net Non-Performing Assets (NNPA) ratio was 1.78%.
• The company maintained a provision coverage ratio of 63.16%.

Operational Metrics

• Disbursements grew by 21.9% year-on-year to ₹5,458.00 crore.
• The company added 2.16 lakh new borrowers, with 43% being new-to-credit customers.
• The branch network expanded by 7.0% year-on-year to 2,114 branches.
• The employee base grew by 8.5% year-on-year to 21,333.

Net Interest Margin Projection for FY26

CreditAccess Grameen has provided guidance on its Net Interest Margin (NIM) for the fiscal year 2025-26. The company projects its NIM to be between 12.6% and 12.8% for FY26. This outlook offers investors insight into the company's expected profitability from its core lending operations for the coming fiscal year.

Management Commentary

Commenting on the results, Mr. Ganesh Narayanan, Chief Executive Officer and Managing Director (Designate) of CreditAccess Grameen, said, "We have commenced FY26 with a positive business momentum, setting the tone for the year ahead. Our Q1 FY26 performance reflects progress across all key dimensions of the business with the highest-ever first-quarter disbursements of ₹5,458 crore."

He further added, "We witnessed a broad-based decline in monthly new delinquency rate across all operating geographies, reducing to 0.46% in June, from 1.34% in November supported by stable manpower, disciplined customer engagement and consistent reduction in customer leverage."

Future Outlook

The company maintains an optimistic outlook for FY26, citing favorable monsoon forecasts and strengthening rural sentiment as factors laying the groundwork for sectoral revival. CreditAccess Grameen's focus on expanding its Retail Finance portfolio, which grew by 134.1% year-on-year, is expected to be a key growth driver.

As CreditAccess Grameen navigates through FY26, the projected Net Interest Margin of 12.6-12.8% suggests the company's confidence in maintaining strong profitability despite the challenges faced in the previous quarter. Investors and analysts will be closely watching how the company balances its growth ambitions with asset quality management in the coming quarters.

CreditAccess Grameen Limited , a leading microfinance institution in India, has reported a significant decline in its net profit for the first quarter. The company's financial results reveal the challenges faced by the microfinance sector amid ongoing economic pressures.

Sharp Decline in Profitability

CreditAccess Grameen's net profit stood at ₹60.19 crore, marking a substantial 85% decrease from ₹397.66 crore reported in the same quarter of the previous year. This sharp decline in profitability can be primarily attributed to a significant increase in impairment provisions on financial instruments.

Revenue and Operational Performance

The company's total revenue from operations decreased marginally to ₹1,462.89 crore, compared to ₹1,512.03 crore in the corresponding quarter of the previous year. Interest income, a key component of the company's revenue, also saw a decline, falling to ₹1,388.14 crore from ₹1,437.15 crore year-on-year.

Surge in Impairment Provisions

The most notable factor impacting CreditAccess Grameen's profitability was the substantial rise in impairment provisions on financial instruments. These provisions increased to ₹571.85 crore, up from ₹174.59 crore in the corresponding quarter of the previous year, representing a 227% increase.

Asset Quality Metrics

The company's gross Stage III (non-performing assets) ratio stood at 4.70%. CreditAccess Grameen maintained a provision coverage ratio of 63.16%, indicating a conservative approach to potential credit risks.

Financial Ratios and Capital Adequacy

Despite the challenges, CreditAccess Grameen maintained strong capital adequacy, with a Capital to Risk-Weighted Assets Ratio (CRAR) of 25.55%. The company's liquidity position remained robust, with a liquidity coverage ratio of 180.66% for the quarter.

Earnings Per Share and Profitability Ratios

The basic earnings per share (EPS) dropped to ₹3.77, compared to ₹24.95 in the same period last year, reflecting the impact of reduced profitability. The Return on Assets (ROA) and Return on Equity (ROE) for the quarter stood at 0.9% and 3.4%, respectively, showing a significant decrease from the previous year's figures.

Management Commentary

While specific management comments were not provided in the available data, the financial results suggest that CreditAccess Grameen, like many in the microfinance sector, is navigating through a challenging period. The increased provisions indicate a cautious approach to potential credit risks in the current economic environment.

Conclusion

CreditAccess Grameen's quarterly results reflect the broader challenges facing the microfinance industry. While the company has maintained strong capital adequacy and liquidity positions, the significant increase in impairment provisions has substantially impacted its profitability. As the fiscal year progresses, stakeholders will be watching closely to see how the company manages these challenges and works towards improving its financial performance.

Note: All figures are based on the standalone financial results of CreditAccess Grameen Limited.