Utkarsh SFB Q4 FY26: Net Loss Narrows 50% QoQ, NPA Drops to 7.7%
Utkarsh Small Finance Bank's audited Q4 FY26 results, approved on May 09, 2026 and published in newspapers on May 11, 2026 under Regulation 47, showed a net loss of ₹188 crore (down 50% QoQ), Gross NPA improving to 7.7%, CRAR at 17.71%, and total disbursements rising 30.1% YoY to ₹4,207 crore. The bank holds ICRA A (Negative) and CARE A (Negative) long-term credit ratings, with ICRA A1+ for its Certificate of Deposit Programme.
*this image is generated using AI for illustrative purposes only.
Utkarsh Small Finance Bank held its board meeting on May 09, 2026, to approve audited financial results for the quarter and financial year ended March 31, 2026. The results highlighted a meaningful recovery in asset quality, a sharp narrowing of net losses, robust growth in disbursements, and a strengthening liability franchise, even as the microfinance (JLG) segment continued to face headwinds from market disruptions. The bank reported a net loss of ₹188 crore in Q4 FY26, lower by 50% from the Q3 FY26 loss of ₹375 crore. For the full year FY26, the bank reported a net loss of ₹1,151 crore, compared to a PAT of ₹24 crore in FY25. Pursuant to Regulation 47 of the SEBI Listing Regulations, the audited financial results for the quarter and financial year ended March 31, 2026 were published in Financial Express (English), Jansatta (Hindi), and Aaj (Hindi) on May 11, 2026. The bank carries a Long Term Credit Rating of ICRA A (Negative) and CARE A (Negative), and a rating of ICRA A1+ for its Certificate of Deposit Programme. Further, pursuant to Regulation 30 of the SEBI Listing Regulations, the audio recording of the earnings conference call with investors and analysts held on May 11, 2026 at 16:00 hours (IST) has been made available on the bank's website. The investor presentation submitted on May 09, 2026 is also available on the bank's website.
Audited Financial Results Summary
The following table presents the key financial metrics from the audited results as published:
| Particulars: | Q4 FY26 | Q4 FY25 | FY26 (Full Year) | FY25 (Full Year) |
|---|---|---|---|---|
| Total Income from Operations (₹ lakhs): | 95,207.02 | 1,16,673.30 | 3,80,974.69 | 4,36,476.03 |
| Net Profit/(Loss) before tax (₹ lakhs): | (23,208.40) | 1,127.72 | (1,50,661.36) | 2,764.72 |
| Net Profit/(Loss) after tax (₹ lakhs): | (18,801.56) | 296.73 | (1,15,097.84) | 2,370.05 |
| Paid-up Equity Share Capital (₹ lakhs): | 1,77,952.37 | 1,10,160.99 | 1,77,952.37 | 1,10,160.99 |
| Reserves (excl. Revaluation Reserve) (₹ lakhs): | — | — | 99,607.82 | 1,87,289.43 |
| Securities Premium Account (₹ lakhs): | 82,083.40 | 56,092.84 | 82,083.40 | 56,092.84 |
| Net Worth (₹ lakhs): | 2,24,718.04 | 2,77,584.21 | 2,24,718.04 | 2,77,584.21 |
| Paid-up Debt Capital / Outstanding Debt (₹ lakhs): | 2,82,943.91 | 2,35,476.58 | 2,82,943.91 | 2,35,476.58 |
| Debt Equity Ratio: | 1.02 | 0.79 | 1.02 | 0.79 |
| EPS Basic (₹): | (1.06) | 0.03 | (8.37) | 0.22 |
| EPS Diluted (₹): | (1.06) | 0.03 | (8.37) | 0.22 |
| Total Debt to Total Assets Ratio: | 9.80% | 8.37% | 9.80% | 8.37% |
| Capital Adequacy Ratio: | 17.71% | 20.93% | 17.71% | 20.93% |
| Gross NPA to Gross Advances: | 7.71% | 9.43% | 7.71% | 9.43% |
| Net NPA to Net Advances: | 3.29% | 4.84% | 3.29% | 4.84% |
| Return on Assets: | (0.67%) | 0.01% | (4.16%) | 0.09% |
The Joint Statutory Auditors issued an unmodified conclusion on the results. The full format of the financial results is available on the websites of NSE, BSE, and the bank.
Management Commentary
Speaking on the results, Mr. Govind Singh, MD & CEO, said, "Q4 FY26 was a decisive quarter of strategic recalibration for the Bank, marked by a disciplined shift toward portfolio quality, secured asset expansion, and operational strengthening. The operating environment remained influenced by residual MFI stress; however, the Bank demonstrated steady progress through focused execution and structural interventions aimed at long-term resilience. Fresh NPA slippages (net of recoveries and upgradations) declined materially to ~₹170 crore in Q4 FY26 vs. ~₹710 crore in Q4 FY25, and the GNPA ratio improved by ~330 bps QoQ to 7.7% as of March 2026. The CASA + RTD ratio strengthened to 83% from 71% a year earlier. Cost of funds declined as repricing took effect, moving down by more than 45 bps YoY in Q4 FY26. The capital position remains satisfactory following a successful ₹950 crore rights issue in November 2025, which materially strengthened Tier-1 capital."
Capital Adequacy and Key Ratios
The bank's capital adequacy remained well above regulatory requirements. CRAR stood at 17.71%, comfortably above the statutory threshold of 15%, while Tier-1 capital was at 14.98% as on March 31, 2026. The bank's CD ratio stood at 83.4% as on March 31, 2026, compared to 86.8% as on March 31, 2025.
| Capital & Ratio Metrics: | Mar-26 | Mar-25 |
|---|---|---|
| CRAR: | 17.71% | — |
| Tier-1 Capital: | 14.98% | — |
| CD Ratio: | 83.4% | 86.8% |
| Gross NPA: | 7.7% | 9.4% |
| Net NPA: | 3.3% | 4.8% |
| Net Interest Margin: | 5.4%* | — |
| Secured Advances (₹ crore): | 9,860 | — |
| CASA + RTD (₹ crore): | 17,916 | — |
*FY 2025-26
Disbursements and Loan Portfolio
The bank reported a strong recovery in disbursements during Q4 FY26. Total disbursements rose 30.1% year-on-year (YoY) and 46.1% quarter-on-quarter (QoQ), driven primarily by a sharp acceleration in Non-JLG disbursements. The gross loan portfolio declined marginally on a YoY basis, reflecting the deliberate slowdown in the JLG segment, while Non-JLG loans posted healthy growth. The MBBL portfolio grew by 122% YoY. The following table summarises the key disbursement and portfolio metrics:
| Particulars (₹ Crore): | Q4 FY26 | Q4 FY25 | YoY Change | Q3 FY26 | QoQ Change |
|---|---|---|---|---|---|
| Total Disbursements: | 4,207 | 3,235 | +30.1% | 2,880 | +46.1% |
| JLG (incl. BC JLG) Disbursements: | 1,425 | 1,398 | +2.0% | 901 | +58.2% |
| Non-JLG Disbursements: | 2,782 | 1,837 | +51.4% | 1,979 | +40.6% |
| Gross Loan Portfolio*: | 19,332 | 19,666 | (1.7)% | 18,306 | +5.6% |
| JLG (incl. BC JLG) Loan Portfolio*: | 5,789 | 9,207 | (37.1)% | 6,419 | (9.8)% |
| Non-JLG Loan Portfolio: | 13,543 | 10,459 | +29.5% | 11,887 | +13.9% |
*Incl. IBPC issued by the Bank
The portfolio mix shifted significantly, with the JLG-to-Non-JLG ratio moving to 30:70 in Q4 FY26 from 47:53 in Q4 FY25. The secured-to-unsecured ratio improved to 51:49 from 43:57 over the same period, reflecting the bank's deliberate strategy to increase secured lending.
Asset Quality Improvement
Asset quality showed a notable turnaround at both the micro-banking and bank level. At the bank level, Gross NPA declined to 7.7% in March 2026 from 11.0% in December 2025 and 9.4% in March 2025. Net NPA improved to 3.3% from 4.5% in December 2025. The following table captures the bank-level asset quality trend:
| Metric: | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 |
|---|---|---|---|---|---|
| Provisions (₹ Crore): | 223 | 411 | 462 | 446 | 244 |
| Credit Cost: | 4.7% | 8.5% | 9.7% | 9.6% | 5.3% |
| PCR %: | 51.2% | 59.2% | 62.7% | 62.2% | 59.3% |
In the micro-banking segment, SMA levels dropped significantly, with total SMA falling to 1.3% in March 2026 from 5.0% in March 2025. Micro-banking NPA also declined sharply to 13.5% from 20.5% in December 2025. The NPA movement table below provides further detail:
| NPA Movement (₹ Crore): | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 |
|---|---|---|---|---|---|
| Opening GNPA: | 1,177 | 1,854 | 2,196 | 2,276 | 1,986 |
| Additions during the period: | 771 | 452 | 464 | 426 | 268 |
| Up-gradations & Recoveries: | 59 | 55 | 49 | 64 | 97 |
| Write-offs: | 34 | 54 | 311 | 652 | 72 |
| ARC Sale: | — | — | 24 | — | 624 |
| Closing GNPA: | 1,854 | 2,196 | 2,276 | 1,986 | 1,460 |
Micro-banking collection efficiency (excluding pre-payments) improved to 99.7% in Q4 FY26. The bank noted that its collection force has been expanded and allocated bucket-wise, with the post-guardrail book demonstrating superior performance. To further de-risk incremental flows, the bank also registered with CGFMU for credit-guarantee coverage on eligible JLG and MBBL disbursements.
Deposits Franchise
The liability franchise remained stable with a meaningful improvement in composition. Total deposits grew 0.4% YoY to ₹21,654 crore. CASA deposits rose 10.6% YoY to ₹5,196 crore, while Retail Term Deposits grew 19.6% YoY to ₹12,720 crore. Bulk Term Deposits declined 40.0% YoY to ₹3,738 crore, reflecting the bank's strategy to reduce high-cost bulk funding. The CASA ratio improved to 24.0% from 21.8% in Q4 FY25, and the share of institutional term deposits within total deposits decreased to 17.3% as of March 31, 2026, from 28.9% on March 31, 2025.
| Deposits (₹ Crore): | Q4 FY26 | Q4 FY25 | YoY Change | Q3 FY26 | QoQ Change |
|---|---|---|---|---|---|
| Total Deposits: | 21,654 | 21,566 | +0.4% | 21,087 | +2.7% |
| CASA Deposits: | 5,196 | 4,699 | +10.6% | 4,611 | +12.7% |
| Retail Term Deposits: | 12,720 | 10,635 | +19.6% | 12,586 | +1.1% |
| Bulk Term Deposits: | 3,738 | 6,232 | (40.0)% | 3,890 | (3.9)% |
| CASA Ratio: | 24.0% | 21.8% | — | 21.9% | — |
| CASA + Retail Term Ratio: | 82.7% | 71.1% | — | 81.6% | — |
The cost of term deposits stood at 8.9% and CASA cost at 4.9% for FY26. The bank's distribution network comprised 1,110 banking outlets as of March 2026, including 779 micro-banking outlets and 331 general banking outlets, with 18 new micro-banking branches opened during FY26.
Wholesale Lending and Other Retail Segments
The wholesale lending (WSL) portfolio stood at ₹2,676 crore as of March 2026, compared to ₹2,240 crore in March 2025 and ₹2,416 crore in December 2025, representing a 14% share of the gross loan portfolio. More than 75% of the WSL book is credit-rated 'A' category or higher by external credit rating agencies, with an average ticket size of ₹15–20 crore across more than 75 customers. The Other Retail Lending portfolio (excluding micro-banking and wholesale, and including MSME, Housing, CE & CV, BC channel, Personal Loans, Gold, OD Against FD, and others) grew to ₹8,931 crore in Q4 FY26 from ₹7,747 crore in Q4 FY25.
| WSL Metrics: | Mar-26 | Mar-25 | Dec-25 |
|---|---|---|---|
| Portfolio Outstanding: | ₹2,676 crore | ₹2,240 crore | ₹2,416 crore |
| Share in Gross Loan Portfolio: | 14% | 11% | 13% |
Other Income and Awards
The bank's other income for Q4 FY26 stood at ₹115 crore, compared to ₹138 crore in Q1 FY26, ₹97 crore in Q2 FY26, and ₹81 crore in Q3 FY26, comprising loan processing fees, PSLC income, recovery from written-off accounts, general banking and other income, and gain on sale of securities or sale of NPA to ARC. On the recognition front, the bank received several accolades including the Alternate Lender of the Year Award at the India Credit Risk Summit and Awards 2026 (Synnex Group), the Digital Dynamo Award at Yubi's Lending Ecosystem, and the Best Embedded Finance Initiative at the ET BFSI EXCELLER Awards 2025. Technology investments under the Utkarsh 2.0 transformation delivered automation, digital underwriting and 360-degree monitoring capabilities that are already improving productivity and risk control. The trading window, which had been closed ahead of the results announcement, was scheduled to reopen on Tuesday, May 12, 2026, 48 hours after the declaration of financial results.
Source: None/Company/INE735W01017/78fcaa4fb100484d.pdf
Historical Stock Returns for Utkarsh Small Finance Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.66% | -1.29% | -11.35% | -20.05% | -33.13% | -68.00% |
Given the sharp decline in JLG portfolio from 47% to 30% of the loan book, what is Utkarsh Small Finance Bank's long-term target mix between microfinance and secured lending, and can Non-JLG growth sustain momentum to offset MFI contraction?
With the Capital Adequacy Ratio declining from 20.93% to 17.71% following substantial losses, how much additional capital might the bank need to raise if credit costs remain elevated, and what funding avenues are being considered?
Will the ICRA A (Negative) and CARE A (Negative) credit rating outlook be revised to stable given the improving asset quality trajectory, and what specific milestones must the bank achieve to trigger a rating upgrade?
19
Access Market Heat-map & Insights 
Create, Save & Share your Screener 
Use 200+ Screening Filters 
