1. At a Glance
India’s largest NBFC-MFI just dropped a net profit of ₹47 Cr in Q4 — down 88%. But let’s not panic yet. CreditAccess Grameen (CAGL) still stands tall with a ₹20,700 Cr market cap, 6% market share, and a well-oiled microcredit engine aimed at India’s underserved rural women.
2. Introduction with Hook
If India’s rural economy were a WhatsApp group, CreditAccess Grameen would be the admin quietly lending ₹20,000 at a time — and collecting it back with German efficiency.
- Market Cap: ₹20,702 Cr
- Gross AUM: ₹27,800+ Cr
- FY25 Net Profit: ₹531 Cr (vs ₹1,446 Cr FY24)
- Borrowings: ₹20,446 Cr
But why the sudden earnings meltdown in Q4? Let’s dive into the borrower’s diary.
3. Business Model (WTF Do They Even Do?)
CAGL is an NBFC-MFI focused on rural women borrowers, using a Joint Liability Group (JLG) model:
- Small-ticket loans (₹20K–₹1 lakh)
- No physical collateral
- Strong repeat business through trust
- 75% of loans go to income-generating activities
They also provide insurance, pensions, and cross-sell financial products via Grameen Koota and Madura Micro Finance arms.
Think of it as: Bajaj Finance meets Self Help Group.
4. Financials Overview
| Metric | FY24 | FY25 |
|---|---|---|
| Revenue (₹ Cr) | 5,167 | 5,752 |
| Net Interest Income | 2,984 | 3,797 |
| Net Profit (₹ Cr) | 1,446 | 531 |
| EPS (₹) | 90.72 | 33.27 |
| Dividend | ₹10/share | Nil |
Ouch Moment: Net profit collapsed by 63%, largely due to credit costs and rising NPAs in Q4.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹1,294 |
| Book Value | ₹436 |
| P/E (TTM) | 39x |
| P/B | 2.97x |
| ROE (FY25) | 7.86% |
EduFair™ Valuation Range:
| Method | Fair Value (₹) |
|---|---|
| Historical P/E (30x) | 1,000 |
| P/B (2.5x conservative) | 1,090 |
| 2-stage DCF (12% disc.) | 1,050–1,200 |
Fair Value Range: ₹1,000 – ₹1,200
At ₹1,294 — market pricing in recovery. But can earnings catch up?
6. What’s Cooking – News, Triggers, Drama
- Q4 earnings shocker: Profit down 88%, GNPA up to 4.76%
- NPA Spike: Post-elections collection stress + seasonal issues
- Concall scheduled: 22 July 2025 at 6 PM IST
- ESOP Allotments + Shareholder dilution ongoing
- FY25 Annual Report Filed: Strong growth, weak finish
Trigger Watch:
- GNPA trend in Q1 FY26
- Management commentary on credit costs
- Expansion in Tier-3/4 towns
7. Balance Sheet
| Item | FY24 (₹ Cr) | FY25 (₹ Cr) |
|---|---|---|
| Equity Capital | 159 | 160 |
| Reserves | 6,411 | 6,796 |
| Borrowings | 21,841 | 20,446 |
| Other Liabilities | 460 | 401 |
| Total Liabilities | 28,871 | 27,802 |
| Total Assets | 28,871 | 27,802 |
Checkpoints:
- Borrowings dipped (a good sign)
- No sudden equity dilution yet
- Adequate buffer in reserves
8. Cash Flow – Sab Number Game Hai
| Flow Type | FY24 (₹ Cr) | FY25 (₹ Cr) |
|---|---|---|
| Operating Cash Flow | -4,734 | 1,125 |
| Investing Flow | -994 | +708 |
| Financing Flow | +5,494 | -1,669 |
| Net Cash Flow | -234 | +164 |
Decoded:
- Massive reversal in cash flows
- Reined in borrowings
- Signs of stabilisation — assuming Q1 doesn’t bring more surprises
9. Ratios – Sexy or Stressy?
| Ratio | FY24 | FY25 |
|---|---|---|
| ROA (%) | 2.7% | 1.88% |
| ROE (%) | 25% | 7.86% |
| NIM (%) | 10.9% | 10.1% |
| GNPA (%) | 2.44% | 4.76% |
| NNPA (%) | 0.76% | 1.73% |
Verdict: It’s giving stressy. But not alarming (yet).
10. P&L Breakdown – Show Me the Money
| Quarter | Revenue (₹ Cr) | Net Profit (₹ Cr) | GNPA (%) |
|---|---|---|---|
| Q1 FY25 | 1,512 | 398 | 1.46 |
| Q2 FY25 | 1,453 | 186 | 2.44 |
| Q3 FY25 | 1,380 | -100 | 3.99 |
| Q4 FY25 | 1,407 | 47 | 4.76 |
Trend: Profits nosedived. NPAs moonwalked. Something definitely broke in H2.
11. Peer Comparison
| Company | P/E | ROE (%) | GNPA (%) | PAT (₹ Cr) |
|---|---|---|---|---|
| CAGL | 39x | 7.9% | 4.8% | 531 |
| Spandana | NA | -31% | 4.7% | -410 |
| Satin CreditCare | 9.5x | 7.5% | 2.4% | 186 |
| Fusion Microfin | NA | -55% | 3.9% | -164 |
| Muthoot Microfin | NA | -8.2% | 2.5% | -401 |
CAGL is the least broken ship in a turbulent microfinance ocean.
12. Miscellaneous – Shareholding, Promoters
| Shareholder Type | Jun 2025 |
|---|---|
| Promoters | 66.43% |
| FIIs | 12.13% |
| DIIs | 12.76% |
| Public | 8.67% |
Trends:
- Promoter holding has fallen ~7% over 3 years
- Retail interest rising (number of shareholders now >1 lakh)
- ESOP dilution in play
13. EduInvesting Verdict™
CreditAccess Grameen is the cleanest shirt in the muddy microfinance pile — but Q4 was like spilling sambar on it.
Positives:
- Consistent long-term AUM growth
- Strong rural network & brand
- Backing from CreditAccess Asia (Netherlands)
Cautions:
- NPA ballooning
- Profit slippage = red flag
- Macro (elections + inflation) still uncertain for FY26
It’s still the best bad option in microfinance. But treat it like a lending business: trust, but verify.
Metadata
– Written by EduInvesting Team | 21 July 2025
– Tags: CreditAccess Grameen, Microfinance, NBFC, Rural Lending, Financial Inclusion
