CreditAccess Grameen (CREDITACC) Q2 FY27 Profit Soars 299% as Credit Costs Fall
The microlender posted its highest-ever quarterly profit, driven by a sharp drop in credit costs and strong asset quality, though margins eased sequentially.
CreditAccess Grameen reported a record quarterly profit of ₹502 crore, up 299% year-on-year. The surge was powered by a 43% drop in credit costs and robust loan growth, though net interest margin dipped from the previous quarter.
CreditAccess Grameen’s latest quarter shows a lender emerging decisively from a tough industry cycle. The company posted its highest-ever quarterly profit, a nearly four-fold jump from a year ago, as a dramatic improvement in asset quality freed up earnings that were previously set aside for bad loans.
The numbers tell a story of powerful recovery. Revenue rose 26% year-on-year to ₹1,904 crore, while net profit surged 299% to ₹502 crore. Sequentially, revenue grew 7% but profit growth was muted at 2%, as the net profit margin eased from 27.7% to 26.3%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 1,903.74YoY +26% | 1,783.49 | 1,508.35 |
| Profit (₹ Cr) | 501.57YoY +299% | 493.39 | 125.81 |
| Net Profit Margin (%) | 26.3YoY +217% | 27.7 | 8.3 |
The Engine: Falling Credit Costs
The extraordinary profit leap was driven by a 43% year-on-year drop in credit costs to ₹299 crore, as reported by CNBC-TV18. This reflects a sharp recovery in asset quality. Gross NPA improved to 1.79% from 4.06% a year ago, while net NPA stood at a healthy 0.59%, according to the company's investor presentation.
Strong loan growth provided the fuel. Assets Under Management (AUM) grew 20% year-on-year to ₹30,946 crore, while disbursements rose 19% to ₹6,355 crore. The retail finance portfolio now makes up 23% of total AUM, up from 21% last quarter, showing successful diversification.
The Coming Squeeze on Margins
Despite the record profit, the quarter also contained the seeds of future margin pressure. The company's net interest margin (NIM) expanded to 15.1%, up from 14.4% last quarter, as yields improved. However, management has already implemented a 50 basis point cut in lending rates this October.
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· CREDITACC
(BSE)
ISIN: INE741K01010
Investing.com reports that management indicated the full impact of lower yields will take four to six quarters to flow through the portfolio. This planned moderation, aimed at retaining customers, is a key reason the stock fell nearly 5% despite the stellar results.
Guidance Points to Sustained Strength
Confident in the first-half performance, management significantly upgraded its full-year outlook. The company now expects a Return on Assets (ROA) of 5.2-5.8%, up from 4.0-4.8%, and a Return on Equity (ROE) of 21-24%, up from 16-20%. The NIM guidance was also raised, though it factors in the recent rate cut.
The focus for the second half is responsible growth while navigating an evolving macro environment. Management told CNBC-TV18 they will remain cautious in districts showing drought-related challenges while meeting the credit needs of seasoned customers.
Key Points
- Net profit surged 299% year-on-year to a record ₹502 crore, primarily due to a 43% decline in credit costs.
- Asset quality improved sharply, with Gross NPA falling to 1.79% and Net NPA at 0.59%.
- Assets Under Management grew 20% YoY, supported by a 19% rise in disbursements and a growing retail finance share.
- Management upgraded FY27 profitability guidance but has begun cutting lending rates, which will pressure margins over the next 4-6 quarters.
- The stock reaction was negative, reflecting investor caution over future yield compression despite the strong operational beat.
Hexa Perspective
This quarter marks a clear inflection point from recovery to strength for CreditAccess Grameen. The profitability leap is real, rooted in better underwriting and a healthier portfolio, not just a low base. The raised guidance signals management's confidence that this is sustainable.
The tension lies ahead. The company is choosing to reinvest some of its margin gains via rate cuts to secure customer loyalty and market share. This trade-off—peak profitability now for stability later—is what investors are weighing. The next few quarters will test whether strong volume growth can offset the coming margin compression and if the improved asset quality can hold.
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