Equitas Small Finance Bank Posts Strong Profitability in Q1FY27, Reversing Previous Loss and Improving Asset Quality

Equitas Small Finance Bank Posts Strong Profitability in Q1FY27, Reversing Previous Loss and Improving Asset Quality​

The Board of Directors of Equitas Small Finance Bank Limited approved its unaudited financial results for the quarter ended June 30, 2026. The bank demonstrated strong profitability and improved asset quality, turning a loss incurred in the corresponding period last year into a quarterly profit.

Equitas reported a Profit After Tax (PAT) of ₹184 Crore for Q1FY27, significantly contrasting with a loss of ₹224 Crore recorded in Q1FY26. The bank’s Return on Assets (ROA) stood at 1.18%, and the Return on Equity (ROE) was reported at 11.76%.

In terms of growth metrics, Gross Advances grew by 27% year-on-year (YoY) and saw a 3% sequential growth (QoQ). Deposits also expanded, showing a 10% YoY increase and a 5% QoQ rise. The bank maintains a CASA ratio of 25%.

Business and Operational Highlights​

The overall disbursements stood at ₹6,784 Crore in Q1FY27, marking a substantial growth of 93% YoY, though this figure declined by 8% QoQ.

Equitas observed healthy expansion across various verticals. The non-MFI book grew 22% YoY. Key drivers included the Housing Finance (HF) segment, which saw a 24% growth, the Micro and Small Enterprises (MSE) sector which grew 28%, and Gold Loan advances that increased by 179% over the previous year.

The bank's Flagship Product, Small Business Loans (SBL), expanded by 15% YoY. Within SBL, Business Loan (BL) advances recorded a 32% YoY increase and accounted for 34% of the overall SBL portfolio. Furthermore, Used Car and Used CV Advances registered growth rates of 30% YoY and 25% YoY, respectively.

Financial Stability and Capital Metrics​

The bank's net worth stands at ₹6,367 Crore. In terms of stability, Total Capital Adequacy Ratio (CRAR) was reported at 19.44%, with Tier I at 16.01% and Tier II at 3.43%. Liquidity Coverage Ratio (LCR) as on June 30, 2026, stood at 178.46%.

Operational ratios included a Net Interest Margin (NIM) of 7.24%, which was noted to be marginally down by approximately 12 basis points (bps) QoQ. The Cost to Income ratio for Q1FY27 stood at 68.38%, compared to 67.52% in Q4FY26 and 70.62% in Q1FY26.

The cost of funds increased by 11 bps, reaching 7.05% in Q1FY27 from 6.94% recorded in Q4FY26. The bank also reported Other Income from Investments (including MTM and dividend) totaling ₹31 Crore for the quarter.

Asset Quality Assessment​

Asset quality showed marked improvement during the quarter. Gross Non-Performing Assets (GNPA) was recorded at 2.36%, reflecting a reduction of 13 bps QoQ from 2.49% in Q4FY26. If the securitization book is included, the GNPA stands at 2.31%.

Non-Performing Assets (NNPA) increased by 2 bps QoQ to 0.70%, up from 0.68% in Q4FY26. The Provision Coverage Ratio (PCR) remained stable at 71.02%, and 86.96% of this figure includes technical write-offs.

Credit Cost saw a significant decline, settling at 1.37% in Q1FY27, down from 6.48% recorded in Q1FY26. Net Slippages were reported at 1.43%, which is the second lowest among first quarters over the last five years.

Key financial metrics for Equitas Small Finance Bank Limited are presented below:

EQUITASBNK Stock Price Movement​

Shares of Equitas Small Finance Bank Limited settled for the day after tumbling by 4.81%, closing at ₹74.63 today. The stock traded within a range, hitting a low of ₹73.26 and reaching an intraday high of ₹79.59.