Ujjivan SFB Q4FY26 Net Profit Surges 238% to ₹282 Crore
Ujjivan Small Finance Bank reported a 238% YoY surge in Q4FY26 net profit to ₹282 Crore, driven by strong NII growth and improved asset quality. The bank's Gross Loan Book grew 27% YoY to ₹40,655 Crore, with the secured portfolio mix rising to 49.4%. For FY27, management guided for approximately 25% loan growth, a RoA of around 1.6%, and a secured portfolio mix exceeding 56%. The Board approved raising up to ₹2,000 Crore in equity capital to fund growth.
*this image is generated using AI for illustrative purposes only.
Ujjivan Small Finance Bank reported a strong financial performance for the quarter and year ended March 31, 2026. The bank's Board of Directors approved the audited financial results, with the Joint Statutory Auditors issuing an unmodified audit opinion. Net profit for Q4FY26 stood at ₹282 Crore, a 238% surge compared to ₹83 Crore in Q4FY25, and a 52% sequential increase from ₹186 Crore in Q3FY26. Total income for Q4FY26 rose 19% YoY to ₹2,186 Crore, while Pre-Provision Operating Profit (PPOP) grew 43% YoY to ₹515 Crore. For the full year FY26, total income grew 12% to ₹8,039 Crore, with an annual net profit of ₹693 Crore.
Quarterly and Annual Performance
The bank delivered strong Net Interest Income (NII) growth of 26.4% YoY to ₹1,092 Crore in Q4FY26, driven by robust loan growth and stable product yield. Net Interest Margin (NIM) for the quarter improved to 8.5%. The following table summarises the key quarterly financial metrics (₹ Crore):
| Metric: | Q4FY26 | Q4FY25 | YoY Growth | Q3FY26 | QoQ Growth |
|---|---|---|---|---|---|
| Interest Earned: | 1,878 | 1,573 | 19% | 1,752 | 7% |
| Other Income: | 307 | 270 | 14% | 295 | 4% |
| Total Income: | 2,186 | 1,843 | 19% | 2,047 | 7% |
| Interest Expended: | 786 | 709 | 11% | 751 | 5% |
| Total Cost: | 1,671 | 1,483 | 13% | 1,608 | 4% |
| Pre-Provision Operating Profit: | 515 | 360 | 43% | 440 | 17% |
| Credit Cost: | 144 | 265 | (46%) | 195 | (26%) |
| Net Profit: | 282 | 83 | 238% | 186 | 52% |
Asset Quality and Capital Adequacy
Asset quality improved during the quarter, with Gross NPAs declining to 2.26% in Q4FY26 from 2.38% in Q3FY26. Net NPAs improved to 0.43% from 0.57% over the same period. The Provision Coverage Ratio stood at 81.41% as at March 31, 2026. The bank's Capital Adequacy Ratio (CAR) stood at 21.14%, compared to 23.10% in the prior year.
| Ratio: | March 31, 2026 | December 31, 2025 | March 31, 2025 |
|---|---|---|---|
| Capital Adequacy Ratio (CRAR): | 21.14% | 21.62% | 23.10% |
| Gross NPA (%): | 2.26% | 2.38% | 2.18% |
| Net NPA (%): | 0.43% | 0.57% | 0.49% |
| Net Worth (₹ Crore): | 6,816 | 6,519 | 6,083 |
Business Growth and Segments
The bank's Gross Loan Book (GLB) grew 27% YoY to ₹40,655 Crore as at March 31, 2026. The secured portfolio now contributes 49.4% of the overall book, up from 43.5% YoY. Disbursements for Q4FY26 totalled ₹9,811 Crore, up 32% YoY. Affordable Housing recorded 35% YoY growth in loan book to ₹8,900 Crore, while MSME expanded 58% YoY to ₹3,230 Crore. Newer business verticals such as Gold Loan, Vehicle Finance, and Agri Banking grew rapidly, contributing around 6% of the loan mix.
FY27 Guidance and Strategic Updates
For FY27, the bank targets approximately 25% loan book growth and a Return on Assets (RoA) of around 1.6%. Management expects credit cost to moderate to 1.4% to 1.5% of the average GLB. The bank plans to add about 20% to its branch infrastructure and expects the secured portfolio mix to reach upwards of 56% by March 2027. Regarding its Universal Banking License application, the RBI acknowledged the bank's efforts towards diversification and advised it to reapply after demonstrating a further diversified loan portfolio. The Board has also approved raising equity capital for an aggregate amount not exceeding ₹2,000 Crore to support medium-term growth.
Historical Stock Returns for Ujjivan Small Finance Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.18% | +1.61% | -5.44% | -0.38% | +20.63% | +81.60% |
Given the RBI's rejection of Ujjivan's Universal Banking License application due to insufficient portfolio diversification, what specific milestones in secured lending mix or segment diversification would likely satisfy the RBI's criteria for reapplication?
With the planned ₹2,000 Crore equity capital raise in H2FY27, how might potential dilution impact existing shareholders, and what valuation premium or discount could the bank command given its current RoE trajectory?
As newer verticals like Gold Loan (292% YoY growth) and Vehicle Finance (101% YoY growth) scale rapidly, what credit quality risks could emerge in these segments during an economic slowdown, particularly given the bank's microfinance-heavy customer base?
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