Equitas Q1 Results: PAT Recovers to ₹184 Crore in Q1 FY27

What Happened ?

Equitas Small Finance Bank delivered a strong operational recovery in Q1 FY27, returning to profitability after reporting a loss in the corresponding quarter last year. The performance was supported by healthy loan growth across retail segments, robust disbursements, improved asset quality, and a sharp reduction in credit costs. According to the press release, the bank also processed ₹6,784 crore of disbursements during the quarter, reflecting strong lending momentum.

key details

Key Highlights

• PAT improved to ₹184 crore from a ₹224 crore loss in Q1 FY26.
• Gross advances increased 27% YoY and 3% QoQ.
• Overall disbursements reached ₹6,784 crore, up 93% YoY.
• Deposits grew 10% YoY and 5% QoQ.
• CASA ratio remained at 25%.
• Small Business Loan portfolio grew 15% YoY.
• Business Loan advances increased 32% YoY.
• Used Car advances grew 30% YoY.
• Used Commercial Vehicle advances rose 25% YoY.
• Gold Loan portfolio expanded 179% YoY.
• Net Worth stood at ₹6,367 crore.
• Capital Adequacy Ratio (CRAR) remained strong at 19.44%.
• Liquidity Coverage Ratio (LCR) stood at 178.46%.
• Certificate of Deposit programme retained the highest A1+ ratings from India Ratings, CareEdge Ratings, and CRISIL.

Note:

• The strong recovery in profitability, healthy credit growth, and improving asset quality indicate strengthening fundamentals across Equitas’ lending franchise. Continued growth in secured lending segments such as housing finance, business loans, and gold loans supports portfolio diversification while maintaining a comfortable capital position for future expansion.

Risk Analysis

Summary:

• Although asset quality improved significantly, the bank continues to operate in a competitive lending environment where funding costs, credit quality, and interest rate movements remain key variables.

Key Risks:

• Cost of funds increased to 7.05% from 6.94% in the previous quarter.
• NIM declined by approximately 12 bps QoQ.
• NNPA increased marginally to 0.70%.
• Deposit mobilisation remains important to support future loan growth.
• Changes in interest rates could impact margins and funding costs.

Worst Case:

• If funding costs continue to rise or asset quality weakens due to macroeconomic pressures, profitability and net interest margins could come under pressure despite healthy loan growth.

Risk Level: Medium

Company Commentary

According to Equitas Small Finance Bank:

• The bank delivered strong growth in advances through robust disbursements across lending verticals.
• Management highlighted significant improvement in profitability, supported by lower credit costs and better operating performance.
• Asset quality continued to improve with lower GNPA and stable provisioning coverage.
• The bank remains well-capitalised with a CRAR of 19.44%, providing adequate capacity to support future business growth.