Equitas Small Finance Bank Shares Rise Up To 9% After Q4 Profit Jumps 406%

Equitas Small Finance Bank reported a strong finish to FY26. The bank posted a net profit of ₹213 crore for the March quarter, a jump of over four times compared to last year and more than double sequentially, helped by better margins and a visible drop in stress on its loan book.

Equitas Small Finance Bank shares saw a sharp uptick on Monday, rising as much as 9.53% to ₹73.11. Around 12:35 PM, the stock was trading close to ₹72.51 (8.47%). The reaction was largely tied to improving operating trends, especially around profitability and asset quality, which had been under watch for a few quarters.

What Really Changed This Quarter?

A closer look shows the shift came from multiple levers working together. Core income held up well, with net interest income rising 18% year on year to ₹981 crore. At the same time, margins widened to 7.29%, as the bank earned more on loans while its cost of funds edged lower.

Operating profit before provisions moved up by roughly 30% to a little over ₹400 crore. But the bigger swing came from lower provisions, which helped lift the final profit number.

There was also a clear improvement in loan quality. Gross non-performing assets (NPAs) came down to 2.49%, while net NPAs dropped further to 0.68%. Credit cost more than halved compared to last year, settling at 1.11%.

Important Q4 Numbers At A Glance

• Net Profit: ₹213 crore, up 406% year-on-year (YoY)

• Net Interest Income: ₹981 crore, up 18% YoY

• Net Interest Margin: 7.29%, up sequentially

• Pre-Provision Operating Profit: ~₹402 crore

• Gross NPA: 2.49%

• Net NPA: 0.68%

• Credit Cost: 1.11%

• Return on Assets: 1.46%

• Return on Equity: 14.10%

• Gross Advances Growth: 22% YoY

• Deposits Growth: 8% YoY

Also Read - Ather Energy Q4 FY26 Loss Narrows To ₹100 Crore As Revenue Jumps 74%

Does The Growth Continue Going Forward?

From the business perspective, there was steady growth in loans. Loan balances increased by 22% year on year. Positivity was witnessed in the housing, small business, and gold loan segments. The outstanding loan portfolio within the gold loan segment exceeded ₹850 crore due to the increasing inclination towards safe borrowing avenues.

The deposit growth was only marginal at 8%. Nonetheless, the capitalisation position of the bank continues to remain robust with a capital adequacy ratio of 20.31%.

In the full year, net profit was lower compared to the previous year, indicating the impact of the March quarter on overall earnings.

In terms of future prospects, the management is optimistic about more than 20% expansion in the loan portfolio in FY27. Though there will be some improvements in the margins and return on investment, the credit cost is projected to rise marginally following a very low cost witnessed in Q4.

Sources:

Business Standard

The Economic Times