Equitas Small Finance Bank reported a net profit of ₹184 crore for the quarter ended June 30, 2026 (Q1FY27), marking a decisive turnaround from the net loss of ₹224 crore recorded in the corresponding quarter of the previous year. This profitability surge was driven by robust disbursements, improved asset quality, and a sharp decline in credit costs to 1.37% from 6.48% in Q1FY26. The bank also announced key leadership changes, appointing Mukund Shyamrao Barsagade as Chief Financial Officer and Taraka Ramana Prathipati as Interim Chief Risk Officer, both effective July 1, 2026.

The Board of Directors approved the unaudited financial results on July 28, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were reviewed by the Audit Committee. The bank highlighted that its Non-MFI book grew by 22% year-on-year, led by strong performance in Housing Finance (HF), Micro and Small Enterprises (MSE), and Gold Loans.

Financial Performance Highlights

Equitas Small Finance Bank’s revenue growth was broad-based, with total operating expenses rising by 16% year-on-year to support expansion. The Cost to Income ratio stood at 68.38% in Q1FY27, an improvement from 70.62% in Q1FY26 but slightly higher than 67.52% in Q4FY26. Net Interest Margin (NIM) for the quarter was 7.24%, marginally declining by approximately 12 basis points quarter-on-quarter. Return on Assets (ROA) and Return on Equity (ROE) for Q1FY27 stood at 1.18% and 11.76%, respectively.

| Metric: | Q1FY27 | Q1FY26 | Change | | ---: | :--- | :--- | :--- | | Net Profit / (Loss): | ₹184 Cr | (₹224 Cr) | Turnaround | | Net Income Growth: | +19% YoY | — | — | | Credit Cost: | 1.37% | 6.48% | Significant Decline | | NIM: | 7.24% | — | -12 bps QoQ |

Asset Quality and Capital Adequacy

Asset quality metrics showed sequential improvement, reinforcing the bank’s credit risk management. The Gross Non-Performing Assets (GNPA) ratio declined by 13 basis points quarter-on-quarter to 2.36% in Q1FY27, compared to 2.49% in Q4FY26. Including the securitization book, GNPA stood at 2.31%. The Net Non-Performing Assets (NNPA) ratio increased slightly by 2 basis points to 0.70% from 0.68%. Provision Coverage Ratio (PCR) remained stable at 71.02%, or 86.96% including technical write-offs. Net slippages were recorded at 1.43%, the second-lowest among first quarters over the last five years.

The Capital Adequacy Ratio (CAR) under Basel-II standards stood at 19.44%, with Tier I capital at 16.01% and Tier II at 3.43%. The bank’s net worth stood at ₹6,367 crore as of June 30, 2026.

Segment-wise Performance and Deposits

Gross advances grew by 27% year-on-year and 3% quarter-on-quarter, supported by overall disbursements of ₹6,784 crore in Q1FY27, representing a 93% year-on-year growth. The flagship Small Business Loans (SBL) portfolio grew by 15% year-on-year, with Business Loan (BL) advances growing 32% year-on-year and contributing 34% of the overall SBL portfolio. Used Car and Used Commercial Vehicle (CV) advances registered growth of 30% and 25% year-on-year, respectively.

Deposits grew by 10% year-on-year and 5% quarter-on-quarter, with the Current Account Savings Account (CASA) ratio holding steady at 25%. The cost of funds increased by 11 basis points to 7.05% in Q1FY27 from 6.94% in Q4FY26. Liquidity Coverage Ratio (LCR) as on June 30, 2026, was 178.46%. The bank’s Certificate of Deposit (CD) programme holds the highest rating of A1+ from India Ratings, CareEdge Ratings, and CRISIL.

What the Numbers Show

The most critical driver of Equitas Small Finance Bank’s turnaround is the dramatic reduction in credit costs. In Q1FY26, high provisioning needs weighed heavily on profitability, whereas in Q1FY27, credit costs dropped to 1.37%, allowing the bank to convert a significant net loss into a healthy profit. The improvement in asset quality ratios, particularly the decline in GNPA, suggests that the bank’s credit portfolio is stabilizing. Additionally, the strong growth in gross advances (27% YoY) outpacing deposit growth (10% YoY) indicates aggressive lending activity, which must be monitored for potential liquidity pressures, although the LCR remains comfortably above regulatory thresholds.

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE063P01018/bebb1add-2481-48da-a165-e9b759b18b59.pdf

Equitas Small Finance Bank reported advances growth of 27% year-on-year (YoY) in Q1, significantly surpassing its FY27 guidance of 20%, reflecting strong momentum in the bank's loan book during the quarter.

Advances Growth Outpaces FY27 Guidance

The bank's Q1 advances growth of 27% YoY marks a notable outperformance against its own FY27 annual guidance target of 20%. The following table summarises the key performance metric reported for the quarter:

The 27% YoY advances growth indicates that Equitas Small Finance Bank's loan book expanded at a pace considerably ahead of the 20% growth rate the bank had projected for FY27. This differential of 7 percentage points between actual Q1 performance and the full-year guidance underscores the strength of credit demand witnessed by the bank during the period.