Motilal Oswal expects the worst of the microfinance cycle to be over, with the sector set for gradual recovery in the second half of FY26. Seasonal floods and high-ticket loan concerns in some states pose short-term challenges, while credit costs remain elevated. Fusion Finance sees an upgrade, Creditaccess Grameen retains its buy rating, and Spandana Sphoorthy is downgraded to neutral.
