Equitas Small Finance Bank Ltd
NSE:EQUITASBNK
Equitas Small Finance Bank Ltd
Equitas Small Finance Bank Ltd. engages in the provision of micro finance loan services. The company is headquartered in Chennai, Tamil Nadu and currently employs 17,607 full-time employees. The company went IPO on 2020-11-02. The firm operates through three segments: Treasury, Wholesale Banking and Retail Banking business. Treasury segment includes all investment portfolios, profit/loss on sale of investments, priority sector lending certificates (PSLC) fee, profit/loss on foreign exchange transaction, equities, income from derivatives and money market operations. The Corporate / Wholesale Banking segment includes all advances to trusts, partnership firms, companies and statutory bodies, which are not included under Retail Banking. The Retail Banking segment includes lending to and deposits, from retail customers and identified earnings and expenses of the segment. Its products or services include micro-loan against property, commercial vehicle finance lending, microfinance lending, demand deposits, time deposits, and fee-based products through its distribution of insurance and mutual fund products, which provides locker facility.
Equitas Small Finance Bank Ltd. engages in the provision of micro finance loan services. The company is headquartered in Chennai, Tamil Nadu and currently employs 17,607 full-time employees. The company went IPO on 2020-11-02. The firm operates through three segments: Treasury, Wholesale Banking and Retail Banking business. Treasury segment includes all investment portfolios, profit/loss on sale of investments, priority sector lending certificates (PSLC) fee, profit/loss on foreign exchange transaction, equities, income from derivatives and money market operations. The Corporate / Wholesale Banking segment includes all advances to trusts, partnership firms, companies and statutory bodies, which are not included under Retail Banking. The Retail Banking segment includes lending to and deposits, from retail customers and identified earnings and expenses of the segment. Its products or services include micro-loan against property, commercial vehicle finance lending, microfinance lending, demand deposits, time deposits, and fee-based products through its distribution of insurance and mutual fund products, which provides locker facility.
Profit Surge: Net profit (PAT) jumped to INR 90 crores, up 36% year-on-year and 273% quarter-on-quarter, even after a one-time INR 29.5 crores labor code provision.
Asset Quality: Asset quality improved, with gross NPA falling to 2.62% (down 20 bps Q-o-Q) and net NPA to 0.88% (down 7 bps Q-o-Q). Credit costs fell sharply to 1.88%.
Advances Growth: Gross advances grew 16% year-on-year to INR 43,268 crores, with small business loans, used vehicles, and affordable housing showing strong momentum.
Deposit Update: Deposits rose 7% year-on-year, with CASA ratio stable at 30% and retail deposits at 73%. Cost of funds declined, with further improvement expected as more deposits are repriced.
Guidance: Management reiterated 15% advances growth for the year (excluding direct assignments) and guided for an exit ROA of 1% for FY26 Q4, targeting 1.5% ROA by FY27 Q4.
Margins: Net interest margin (NIM) improved to 6.72% (up 43 bps Q-o-Q). Management expects NIM to remain stable or tick up slightly in coming quarters.
Capital Position: Capital adequacy remains strong at 20.47%. No capital raise is expected in the first half of next year.
Strategic Focus: The bank is keeping its microfinance mix capped at ~10% for portfolio stability and targeting 20–25% loan growth for FY27.
