ESAF Small Finance Bank turns profitable in Q1FY27, reports ₹80 crore PAT
ESAF Small Finance Bank achieved a significant turnaround in Q1FY27, reporting a PAT of ₹80 crore against a prior-year loss. Driven by a 179% rise in PPOP and improved asset quality, the bank's total business crossed ₹50,000 crore. The earnings call was held on August 3, 2026.
*this image is generated using AI for illustrative purposes only.
ESAF Small Finance Bank delivered a decisive financial turnaround in the quarter ended June 30, 2026, reporting a profit after tax (PAT) of ₹80 crore. This marks a significant shift from the net loss of ₹81 crore recorded in the corresponding period of the previous year. The bank’s total business surpassed the ₹50,000 crore milestone, driven by robust growth in both advances and deposits. The earnings conference call discussing these results was held on August 3, 2026, at 4:00 PM IST, with the audio recording made available on the bank’s website.
The profitability surge was underpinned by improved operational efficiency and stronger pricing power. Pre-provision operating profit (PPOP) jumped 179% year-on-year to ₹349 crore. The cost-to-income ratio improved markedly to 58.1% from 78.2% in Q1FY26. Net interest margin (NIM) expanded to 7.9% from 6.0% a year ago, aided by a decline in the cost of funds to 7.1% from 7.4%. Dr. K. Paul Thomas, Managing Director & CEO, attributed the performance to the bank’s transformation journey and its focus on a diversified portfolio.
Financial Performance Highlights
Interest income crossed the ₹1,000 crore threshold, reaching ₹1,098 crore, a 33% increase year-on-year. Return on assets (RoA) stood at 1.0%, while return on equity (RoE) was 17.5%. The bank maintained a strong capital adequacy ratio (CRAR) of 23.9% and a net worth of ₹1,864 crore. Liquidity remained healthy with a liquidity coverage ratio (LCR) of 133.3% as of June 30, 2026.
| Metric | Q1FY27 | Q1FY26 | Change |
|---|---|---|---|
| Profit After Tax (₹ Cr) | 80 | (81) | Turnaround |
| Interest Income (₹ Cr) | 1,098 | ~825* | +33% YoY |
| PPOP (₹ Cr) | 349 | ~125* | +179% YoY |
| NIM (%) | 7.9% | 6.0% | Expansion |
| Cost-to-Income Ratio (%) | 58.1% | 78.2% | Improvement |
Figures derived from percentage changes provided in the source.
Asset Quality and Portfolio Growth
Asset quality showed marked improvement, with gross non-performing assets (GNPA) declining to 5.4% from 7.5% in June 2025. Net non-performing assets (NNPA) fell to 0.8% from 3.8%. The provision coverage ratio increased to 85.5% from 73.2%. Slippages in Q1FY27 were 84% lower compared to Q1FY26 and 29% lower sequentially.
Gross advances grew 27% year-on-year to ₹23,216 crore, while deposits rose 19% to ₹26,924 crore. Secured advances constituted 62% of the total portfolio, up from 59% previously. The Emerging Household (EH) portfolio grew 185% year-on-year. CASA deposits rose 12% to ₹6,297 crore, maintaining a CASA ratio of 23.4%.
Regulatory Disclosure
Pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ESAF Small Finance Bank Limited informed BSE Limited and National Stock Exchange of India Limited that its Unaudited Standalone Financial Results for Q1FY27 were published on August 1, 2026, in "Business Line" and "Deepika" newspapers. Ranjith Raj P, Company Secretary and Compliance Officer, signed the intimation.
Historical Stock Returns for ESAF Small Finance Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -3.47% | -4.69% | -1.36% | +53.69% | +44.58% | 0.0% |
Can ESAF Small Finance Bank sustain its expanded Net Interest Margin of 7.9% amidst potential competitive pressure in the deposit market?
What specific strategies will the bank employ to maintain the momentum in its 185% YoY growing Emerging Household portfolio without compromising asset quality?
How might the bank's strong capital adequacy ratio of 23.9% influence its future capital raising plans or dividend payout policies?
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