Suryoday Small Finance Bank has published the transcript of its earnings conference call held on July 24, 2026, discussing the unaudited financial results for the quarter ended June 30, 2026 (Q1FY27). The disclosure follows the bank’s announcement of a 113.1% year-on-year surge in Profit After Tax (PAT) to ₹75.2 Cr. The transcript provides investors with detailed insights into the operational drivers behind the strong top-line growth, improved asset quality, and the bank’s strategic transition towards individual lending and digital channels.

The submission was made pursuant to Regulation 30 read with Clause 15 of Paragraph A in Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Krishna Kant Chaturvedi, Company Secretary & Compliance Officer, signed the intimation letter dated July 29, 2026, confirming that the transcript is available on the bank’s website alongside the previously released audio recording.

Financial Performance and Asset Quality

Management highlighted significant improvements in key financial metrics for Q1FY27. Net total income rose 30.3% year-on-year to ₹463.6 Cr. The loan book expanded robustly, with Gross Advances reaching ₹14,376 Cr, up 32.5% from the previous year. Deposits grew by 29.4% YoY to ₹14,634 Cr, with retail deposits constituting 87.3% of the base as of June 2026.

Asset quality showed marked improvement, driven by effective resolution strategies and support from the Central Government Financial Management Unit (CGFMU). Gross Non-Performing Assets (GNPA) declined to 6.5% from 8.5% in Q1FY26, while Net NPA dropped significantly to 1.2% from 5.6%. The Provision Coverage Ratio (PCR), excluding technical write-offs, jumped to 81.8%.

Strategic Shifts and Digital Growth

Baskar Babu Ramachandran, Managing Director and CEO, emphasized the bank’s strategic transition from the traditional Joint Liability Group (JLG) model to individual loans, referred to as Vikas Loans (VL). Individual loans now contribute approximately 80% of monthly onboarding. The bank aims to further reduce JLG exposure over the next 12–18 months, focusing on customer segmentation based on credit behavior and unsecured loan history.

Digital initiatives continue to gain traction. The phygital customer base acquired through digital deposits and other products stands at approximately 1 million customers. Digital deposits sourced during the quarter amounted to ₹2,222 Cr, with an average daily accretion of ₹6 Cr. Credit on UPI customers crossed 9 lakh, reflecting seamless onboarding via Video KYC (VKYC).

What the Numbers Show

The divergence between flat Net Interest Margin (NIM) at 7.2% and rising profitability suggests that volume growth in advances and deposits is the primary driver of profit acceleration. The sequential reduction in NNPA from 4.2% to 1.2% indicates effective resolution of stressed assets, largely aided by CGFMU claims. The bank received ₹387 Cr in CGFMU claims during the quarter, significantly bolstering its provision coverage. Management guided that cost of funds would remain stable at around 7.5% for the rest of the year, supporting stable NIMs despite pressure on fixed deposit rates.

Suryoday Small Finance Bank reported a strong set of unaudited financial results for the quarter ended June 30, 2026 (Q1FY26), with net profit more than doubling on a year-on-year basis. The Board of Directors approved the results at its meeting held on July 23, 2026, and the financials have been subjected to a limited review by joint statutory auditors Mukund M. Chitale & Co. and Gokhale & Sathe, who issued an unmodified review report.

Key Financial Highlights

The bank's total income for Q1FY26 stood at ₹77,022 lakhs, a significant increase from ₹60,382 lakhs in Q1FY25 and ₹69,189 lakhs in Q4FY26. Interest earned rose to ₹62,236 lakhs from ₹49,517 lakhs in the year-ago quarter, while other income climbed to ₹14,786 lakhs from ₹10,865 lakhs. Net profit for the quarter stood at ₹7,518 lakhs compared to ₹3,528 lakhs in Q1FY25, reflecting robust year-on-year growth. The following table summarises the key profit and loss metrics:

Asset Quality and Key Ratios

The bank's asset quality showed notable improvement in net NPA levels. Gross NPAs stood at ₹93,115 lakhs as on June 30, 2026, compared to ₹91,752 lakhs as on June 30, 2025, while net NPAs declined sharply to ₹16,955 lakhs from ₹59,304 lakhs in the year-ago period. The gross NPA ratio stood at 6.60% in Q1FY26 versus 6.55% in Q4FY26, while the net NPA ratio improved significantly to 1.27% from 4.21% in Q4FY26 and 5.64% in Q1FY25.

Figures for the respective quarter ended are not annualized.

Segment Performance

Retail Banking remained the dominant revenue contributor, with segment revenue of ₹72,294 lakhs in Q1FY26 compared to ₹55,074 lakhs in Q1FY25. The Treasury segment posted revenue of ₹8,734 lakhs, while the Corporate segment contributed ₹4,615 lakhs. Total segment assets grew to ₹20,20,389 lakhs as on June 30, 2026, from ₹16,05,855 lakhs as on June 30, 2025.

Notable Disclosures

The bank recognized a claim receivable of ₹387.45 crores (net of recovery) under the CGFMU Scheme with NCGTC during the quarter ended June 30, 2026. Although the amount was received on July 1, 2026, subsequent to the reporting date, the receipt was considered virtually certain as on June 30, 2026, and accordingly recognized in the financial statements for the quarter. The claim was subsequently realized in full on July 1, 2026.

The bank carries a floating provision of ₹6,427 lakhs as on June 30, 2026, of which ₹510 lakhs was created during the quarter ended June 30, 2026. Total financial indebtedness, including short-term and long-term debt, stood at ₹2,64,045 lakhs as on the reporting date, with no defaults reported on loans or debt securities. The bank does not have any subsidiary, associate, or joint venture as on June 30, 2026, making consolidation of financial statements not applicable.