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Investing.com - HSBC has upgraded CreditAccess Grameen Ltd (NS:CREDAG) from Reduce to Hold, while raising its price target to INR1,230.00 from INR1,120.00.
The upgrade comes as HSBC observes an improving operating environment for the microfinance institution, noting that unlike previous quarters, it did not need to cut earnings estimates significantly this quarter.
HSBC identifies several indicators suggesting CreditAccess Grameen may be at the bottom of its earnings downcycle, including year-over-year growth in disbursements showing better risk appetite and low portfolio at risk (PAR) addition trends pointing to potentially lower credit costs in the second half of fiscal year 2026.
The firm cautions that recovery could still be delayed, with operating cost growth potentially remaining high and second quarter FY26 possibly facing elevated credit costs, which might lead to an increase in the company’s full-year credit cost guidance.
At 2.2 times FY27 estimated book value per share, HSBC believes the risks and rewards for CreditAccess Grameen are now balanced, supporting its Hold rating.
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