Poonawalla Fincorp, CreditAccess Grameen shares gain on strong Q1 business updates; Bandhan Bank slips 3%

Mumbai, July 5, 2025 — Shares of non-banking financial companies (NBFCs) Poonawalla Fincorp and CreditAccess Grameen surged in Friday’s trade, driven by robust business updates for the June quarter (Q1 FY26). In contrast, Bandhan Bank witnessed a sharp 3% decline after reporting a dip in loan growth and continued asset quality concerns, prompting caution among investors.

Poonawalla Fincorp Soars Over 4% on Accelerated Loan Growth

Poonawalla Fincorp's stock jumped 4.1% intraday on the BSE to ₹562 after the company reported a 52% year-on-year (YoY) increase in its assets under management (AUM), reaching ₹25,700 crore in Q1 FY26. The company attributed the growth to sustained traction across personal loans, business loans, and professional loans.

In its quarterly update, the NBFC highlighted:

• Disbursements rose by 63% YoY to ₹6,380 crore.

• Customer base expanded to over 5 million.

• Net NPA remained under 0.8%, reflecting strong asset quality.

“The growth trajectory is consistent with our digital-first approach and risk-calibrated expansion,” said Abhay Bhutada, Managing Director of Poonawalla Fincorp. “We are well-positioned to sustain profitability with low delinquencies and improved operational leverage.”

Brokerage house Motilal Oswal maintained a ‘Buy’ rating, noting that the company is on track to achieve its FY26 ROA target of 3.5% and ROE of over 16%.

CreditAccess Grameen Rises on Record AUM and Collection Efficiency

CreditAccess Grameen also witnessed buying interest, with shares gaining nearly 3.6% to ₹1,487, following a solid quarterly update. The microfinance institution (MFI) reported a 33% YoY growth in its consolidated AUM to ₹26,500 crore, with a sequential growth of 5%.

Key metrics reported by CreditAccess include:

• Disbursements at ₹6,125 crore, up 29% YoY.

• Collection efficiency sustained at over 99.5%.

• Gross loan portfolio diversified across 15 states with no region contributing more than 15%.

“Our consistent focus on borrower engagement, risk mitigation, and geographic diversification continues to yield results,” said Udaya Kumar Hebbar, MD & CEO of CreditAccess Grameen. “We are seeing strong demand for microcredit, especially in rural areas post-harvest.”

Analysts at Axis Securities upgraded the stock to ‘Add’, citing CreditAccess’s ability to maintain low credit costs and industry-leading return ratios in the MFI segment.

Bandhan Bank Dips 3% on Muted Growth, NIM Concerns

In stark contrast, Bandhan Bank faced selling pressure, with shares declining 3% to ₹182. The private lender reported a modest 5% YoY rise in advances to ₹1.13 lakh crore in Q1 FY26, missing analyst estimates. The sequential loan growth stood at just 1.1%.

The update also highlighted:

• Deposits grew 4.7% YoY, but CASA ratio dropped to 35.2% from 38.3% a year ago.

• Gross NPAs remained elevated around 7.1%.

• Net interest margin (NIM) pressure continued due to rising cost of funds and lagging yield recovery.

“Bandhan's heavy exposure to the East and North-East, coupled with its unsecured micro-loan portfolio, continues to act as an overhang,” said Deepak Shenoy, Founder of Capitalmind. “The recovery is gradual, but investors are likely to remain cautious unless asset quality improves materially.”

Brokerage ICICI Securities downgraded the stock to ‘Hold’, pointing to weak return metrics and volatility in earnings due to ongoing provisioning requirements.

Sectoral Context: NBFCs in Focus Amid Rate Pause

The broader NBFC and MFI sectors have benefited from the Reserve Bank of India’s (RBI) pause in rate hikes and improving rural credit demand. Microfinance lenders, in particular, have seen tailwinds from agricultural recovery, rising self-employment, and easing inflationary pressures in rural India.

“We expect the second half of FY26 to see stronger demand from small businesses and rural households, which bodes well for lenders like CreditAccess and Poonawalla,” said Madhavi Sharma, Banking & Finance Analyst at HDFC Securities. “However, lenders with concentration risks, such as Bandhan Bank, may continue to face scrutiny.”

Investor Outlook: Stock Picks in Financials Get Selective

While the financials sector remains a favored theme among long-term investors, the market has started differentiating sharply between lenders with consistent growth and asset quality versus those with concentration and provisioning challenges.

Poonawalla Fincorp and CreditAccess Grameen are gaining favour for:

• Strong disbursement growth

• Controlled NPAs

• Expanding margins

In contrast, Bandhan Bank continues to struggle with:

• Asset quality stress

• Weak profitability metrics

• Sluggish deposit mobilization

“Investors should focus on companies with diversified portfolios, granular underwriting, and digital agility,” said Anuj Maheshwari, Portfolio Manager, JM Financial.

The divergence in performance among lenders post-Q1 updates underscores the importance of disciplined growth and risk management. While Poonawalla Fincorp and CreditAccess Grameen are reinforcing investor confidence through robust financials and forward-looking strategies, Bandhan Bank’s recovery journey remains challenged by legacy asset issues. Market participants will closely watch the detailed quarterly results and management commentary for further cues.