Equitas Small Finance Bank Q2 FY26 Net Profit Jumps 87% To ₹24 Crore; Asset Quality Steady

Chennai, October 31, 2025: Equitas Small Finance Bank Ltd (NSE: EQUITASBNK) posted a sharp turnaround in its September quarter results for FY26, with net profit increasing to ₹24 crore, an 87% increase year-on-year, driven by lower credit costs and steady advances growth.

Equitas Small Finance Bank Ltd, headquartered in Chennai, operates across 18 states and Union Territories with a network of over 1,040 branches and a workforce exceeding 27,000 employees. The bank primarily focuses on retail and MSME lending, offering a broad portfolio of financial products such as small business loans, microfinance, vehicle loans, and affordable housing finance. It is a publicly listed entity, traded on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

Financial Performance Overview

In the second quarter of FY26, Equitas Small Finance Bank reported a total income of ₹1,618 crore, marking a 4% year-on-year increase, though slightly lower than the previous quarter’s figure. Net interest income declined to ₹774 crore, but profit after tax surged 87% year-on-year to ₹24 crore. The net interest margin (NIM) softened to 6.29%, while return on assets (RoA) improved to 0.18% and return on equity (RoE) rose to 1.65%, reflecting better operational efficiency.

Balance Sheet and Deposits

Equitas Small Finance Bank posted a 9% year-on-year rise in gross advances, reaching ₹39,123 crore, led by robust growth in its Small Business Loans and Vehicle Finance portfolios. Total deposits increased 11% to ₹44,094 crore, with the CASA ratio steady at 31%. The bank maintained its cost of funds at 7.35% and reported a Capital to Risk-Weighted Assets Ratio (CRAR) of 20.74%, underscoring a strong capital base and stable funding profile.

Asset Quality and Provisions

Asset quality remained resilient during the quarter. Gross NPA stayed unchanged at 2.82%, while Net NPA held steady at 0.95%. The bank maintained a Provision Coverage Ratio (PCR) of 66.93% of GNPA, supported by prudent provisioning practices. Additionally, during the quarter, the bank transferred ₹216 crore worth of NPA assets to an Asset Reconstruction Company (ARC), further strengthening its balance sheet and improving overall asset quality stability.

Operational and Strategic Highlights

Microfinance disbursements surged 156% quarter-on-quarter to ₹682 crore, following the bank’s renewed focus on this segment with stricter underwriting norms. Non-MFI disbursements also recorded robust momentum, rising 45% sequentially to ₹4,700 crore, reflecting broad-based growth across lending categories.

The bank has enhanced its digital offerings, now allowing customers to open digital savings accounts directly through its mobile app. It also plans to launch digital recurring term deposits in Q3 FY26. Additionally, the bank introduced Mobile App 2.0 and Insta Banking, featuring biometric authentication and completely paperless transactions to strengthen its digital banking ecosystem.

Share Market Performance

Equitas Small Finance Bank’s share price declined on October 31, 2025, closing at ₹57.15, down ₹2.06 or about 3.5% from the previous close of ₹59.21. The stock opened at ₹59.58, touched an intraday high of ₹61.90, but later lost momentum to end at the day’s low.

REF: https://nsearchives.nseindia.com/corporate/EQUITASBNK_31102025143617_ESFBInvestorpresentationQ2.pdf

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