Equitas Small Finance Bank Q4FY26 PAT Surges 406 Percent to Record 213 Crore

Key numbers

PAT Q4FY26	₹213 Cr406% YoY Growth
Market Cap	₹7,884 CrMicrofinance
NIM	7.29%57 bps QoQ increase
RSI	54.54Neutral Zone

Key highlights

• Profit After Tax reached a record 213 Crore in Q4FY26, up from 42 Crore in the same period last year
• Net Interest Margin expanded by 57 basis points sequentially to reach 7.29 percent
• Gross Advances grew 22 percent year-on-year to 46,165 Crore, led by strong growth in gold loans and NBFC lending
• Cost of Funds declined significantly from 7.54 percent in Q4FY25 to 6.94 percent in Q4FY26
• Asset quality showed marked improvement with GNPA reducing to 2.49 percent and net slippages falling to 0.79 percent
• Microfinance DPD (1-90 days) reduced to 1.43 percent from 7.82 percent a year ago
• The bank launched new products including ARTHA for HNI segments and Elite Lite for the mass affluent

Financial Performance and NIM Expansion

Equitas Small Finance Bank reported a robust financial performance for the fourth quarter of FY26, characterized by high profitability and margin expansion. Net Interest Income (NII) grew by 18 percent year-on-year to reach 981 Crore. The bank achieved a significant Net Interest Margin of 7.29 percent, up from 7.13 percent in the previous quarter, primarily driven by a decline in the cost of funds.

This margin expansion, coupled with a 136 percent sequential growth in Profit After Tax to 213 Crore, highlights the bank's operational efficiency. For the full year FY26, the bank reported a consolidated PAT of 103 Crore.

Advances and Asset Quality Trends

• Gross advances reached 46,165 Crore, marking a 22 percent year-on-year growth driven by diversified verticals.
• Small Business Loans (SBL) remains the flagship product, contributing 40 percent of the total advances book.
• The Gold loan portfolio witnessed exceptional growth of 180 percent over the previous year, crossing the 850 Crore mark.
• Asset quality improved significantly as GNPA stood at 2.49 percent, down from 2.89 percent in the prior year.
• Net slippages plummeted to 0.79 percent from 2.52 percent in Q3FY26, reaching their lowest level in ten quarters.
• Provision Coverage Ratio (PCR) remains healthy at 73.03 percent, strengthening the bank's balance sheet resilience.

Strategic Liability Management

The bank's Liability 2.0 strategy has been a key driver in reducing interest expenses and enhancing competitiveness. By narrowing the cost differential on retail term deposits compared to larger banks, Equitas reduced its cost of funds to 6.94 percent during the quarter. Total deposits grew 8 percent year-on-year to 46,533 Crore, with the CASA ratio standing at 26 percent.

The bank's focus on the mass affluent and HNI segments through new product launches like ARTHA and Elite Lite has supported high-quality deposit mobilization. Additionally, the recently launched FCNR deposits have already crossed 29 million USD.

Management Outlook and Sector Dynamics

Management has expressed high confidence in future growth, stating that the worst of the credit stress in the Microfinance (MFI) sector is now in the past. For FY27, the bank is targeting a growth rate of 20 percent plus in overall advances, supported by balanced growth across all product categories. The bank expects to maintain MFI advances at approximately 10 percent of the total portfolio.

While credit costs benefited from seasonal factors in Q4FY26, management anticipates a normalization of these costs in the coming year. The bank aims for an exit Return on Assets (ROA) of approximately 1.5 percent by Q4FY27.

Key Metrics to Watch

• Sustainability of the 7.29 percent NIM in a potentially changing interest rate environment.
• Progress of the 20 percent plus growth guidance for overall advances in FY27.
• The stabilization of credit costs following the seasonal benefits observed in the current quarter.
• Growth in the Gold loan and NBFC segments which showed significant momentum in FY26.
• Impact of the Liability 2.0 strategy on further reducing the cost of savings accounts and deposits.

“MFI DPD shows significant improvement QoQ on account of increased collection efficiency. With X-bucket CE at 99.71%, asset quality trends are strengthening, indicating that credit stress has largely stabilized and the worst is behind us.”

“With these positive levers in place, expect to achieve an exit ROA of about 1.5% in Q4FY27. For full year FY27, we expect ROA of ~1.2%”

Equitas Small Finance Bank · financial snapshot

Share price	₹69.07
Market capitalisation	₹7,884.84 Cr
Revenue (annual)	₹6,794.24 Cr
Net profit (annual)	₹103.08 Cr
Revenue (latest quarter)	₹1,836.35 Cr+8.55% vs previous quarter
Net profit (latest quarter)	₹212.68 Cr+136.24% vs previous quarter
P/E (TTM)	76.49×Sector 21.96×
Promoter holding	0%0.00% QoQ
FII holding	14.74%Current quarter

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.