Equitas SFB Q1 FY27 Results: Returns To Profit As Provisions Drop Sharply

Equitas Small Finance Bank opened FY27 on a positive note by returning to the black after reporting a loss in the same quarter last year. The lender posted a net profit of ₹184 crore for the June quarter, helped by a sharp reduction in credit costs and steady growth in its core business. In the March quarter, the bank had reported a profit of ₹213 crore.

The biggest change this quarter came from provisioning. After setting aside a substantially higher amount during the microfinance stress seen last year, the bank's provisions dropped sharply in Q1 FY27. Alongside this, operating income improved, the loan book continued to expand and asset quality also moved in the right direction, giving a further boost to the quarterly performance.

Key Highlights

• Revenue / Total Income: ₹2,216 crore (vs ₹1,941 crore YoY)
• Net Profit: ₹184 crore (vs loss of ₹224 crore YoY)
• Dividend: No dividend announced
• Pre-Provision Operating Profit (PPOP): ₹405 crore (vs ₹315 crore YoY)
• Net Interest Margin (NIM): 7.24%
• Gross NPA: 2.42% (vs 2.92% YoY)
• Provisions: ₹161 crore (vs ₹612 crore YoY)
• Assets Under Management (AUM): ₹47,641 crore (up 27% YoY)

How Did The Business Perform?

Equitas Small Finance Bank reported a much stronger performance compared with the same period last year. The biggest contributor to the earnings recovery was the sharp fall in credit provisions, which declined to ₹161 crore from ₹612 crore a year earlier.

Operating performance also improved during the quarter. Pre-provision operating profit rose to ₹405 crore, supported by an increase in total income to ₹2,216 crore from ₹1,941 crore in the year-ago period.

The bank's loan book continued to expand, with assets under management growing 27% year-on-year to ₹47,641 crore.

On the asset quality front, the gross non-performing asset ratio improved to 2.42% at the end of June from 2.92% a year earlier.

Net interest margin stood at 7.24%, slipping 12 basis points from the March quarter, although it remained at a healthy level for the bank.

Management Commentary

Managing Director P. N. Vasudevan said the sharp reduction in provisions should be viewed in the context of the unusually high provisioning undertaken a year ago. "We frontloaded provisions in the first quarter last year when the microfinance crisis peaked. It was an outlier."

His remarks suggest that the previous year's elevated provisioning was an exceptional measure, allowing the bank's earnings to normalise as credit costs moderated.

Market Reaction

Equitas Small Finance Bank shares are likely to remain in focus after the lender returned to profit in the June quarter.

Investors will closely watch whether the improvement in profitability, lower provisioning and healthier asset quality can be sustained over the coming quarters.

At market close on Tuesday (28 July 2026), Equitas Small Finance Bank share price stood at ₹74.63 apiece on the National Stock Exchange.

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