Q1 2026 Equitas Small Finance Bank Ltd Earnings Call Transcript
Key Points
- Equitas Small Finance Bank Ltd (BOM:543243) reported a healthy Pre-Provision Operating Profit (PPoP) of INR 316 crores for Q1 FY26, reflecting strong core operations.
- The bank's secured advance book now constitutes 90% of its total portfolio, showcasing a successful diversification strategy.
- Non-microfinance book grew by 18% year-on-year, driven by a 22% increase in small business loans and a 50% rise in used car finance.
- Total deposits grew by 18% year-on-year to INR 44,379 crores, with a stable CASA ratio of 29% and retail deposits forming 73% of the deposit base.
- The bank's capital adequacy remains strong, with a CRAR of 20.48% and plans to raise INR 1,250 crores in Tier 1 equity to support future growth.
- Equitas Small Finance Bank Ltd (BOM:543243) reported a loss of INR 224 crores for Q1 FY26, primarily due to additional provisions made to strengthen the balance sheet.
- The net interest margin dropped to 6.55% from 7.9% last year, largely due to a contraction in the microfinance portfolio.
- The cost-to-income ratio increased to 70% from 65% in the same quarter last year, driven by higher employee expenses and other operational costs.
- Microfinance portfolio contracted by 41% year-on-year, with collection efficiency expected to normalize only by the third or fourth quarter of the financial year.
- The bank's GNPA stood at 2.82% and NPA at 0.95%, with ongoing challenges in the microfinance segment impacting overall asset quality.
Ladies and gentlemen, good day, and welcome to Equitas Small Finance Bank Limited financial performance for Q1 FY26 earnings conference call.
We have with us today Mr. P.N. Vasudevan, MD and CEO; Mr. Balaji N., Executive Director, Technology and Operations; Mr. Sridharan N., CFO; Mr. Jagadesh J., Head of Assets; Mr. Murali Vaidyanathan, Senior President and Country Head, Branch Banking, Liabilities, Product, and Wealth; Mr. Gopalkrishnan G., Head, Treasury; Mr. Dheeraj Mohan, Head, Strategy.
(Operator Instructions) Please note that this conference is being recorded. I would now like to hand the conference over to Mr. P.N. Vasudevan, sir. Thank you, and over to you, sir.
Thank you. Good evening to all of you, and thank you for taking your time out to attend this call. I would also like to take the pleasure of inviting our Chairman, Mr. Anil Kumar Sharma, for this con call. We had a Board meeting in Chennai today, and he was
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