Suryoday Small Finance Bank Q1 FY26 PAT Falls 50% YoY to ₹35.3 Cr Despite Strong Loan Growth

Navi Mumbai, July 25, 2025 – Suryoday Small Finance Bank Limited (NSE: SURYODAY, BSE: 543279) reported a massive 49.60% decline in net profit (₹35.3 crore) for Q1FY26. This was despite the bank attaining a double-digit growth in advances and deposits. The profit was reduced due to higher credit costs and a sharp decline in net interest income.

Suryoday Small Finance Bank Stock Performance

The stock opened in red and traded at ₹132.58 at 10:30 AM (down by 4.23% from the previous day’s close). The stock has declined slightly more than 5% in the past three months. The traded volume today was a bit higher than normal (4,09,506 shares traded).

Key Financial Highlights

In Q1 FY26, the company’s Gross Advances grew by 20% YoY to ₹10,846 crore, and Disbursements rose 30% YoY to ₹2,261 crore, reflecting strong credit growth. Deposits surged 39% YoY to ₹11,312 crore, indicating robust customer traction. However, Net Interest Income declined by 15.7% YoY to ₹247.1 crore, and Pre-Provision Operating Profit dropped 24.5% YoY to ₹108.9 crore. PAT halved, falling 49.6% YoY to ₹35.3 crore, highlighting pressure on profitability.

Other Financial Ratios

In Q1 FY26, asset quality weakened sharply as GNPA rose to 8.5% (up 579 bps YoY) and NNPA climbed to 5.6% (up 520 bps). Profitability metrics deteriorated with Net Interest Margin falling 282 bps YoY to 7.2%, while Cost-to-Income Ratio worsened to 69.4% (up 909 bps), and Provision Coverage Ratio dropped drastically to 35.4% from 83.9%, reflecting reduced buffers against stressed assets.

Segment Performance and Strategy

• Inclusive Finance (IF) stress persisted, resulting in a decline in collection efficiency (86.4% vs. 94.8% YoY).
• Retail Secured Lending saw strong growth, especially in mortgages and vehicle (wheels) finance.
• The non-inclusive finance book now accounts for over 52% of total advances, marking a significant shift in the portfolio.
• Disbursements jumped 30% YoY to ₹2,261 crore.
• MSME lending and secured segments are expected to drive medium-term growth.

Management Commentary

“Despite stress in the microfinance environment, we’ve expanded the balance sheet while proactively managing asset quality. Our GNPA stood at 8.5%, fully covered through CGFMU claims. We expect better profitability with improving collection efficiency and a larger secured loan book,” said Baskar Babu Ramachandran, MD & CEO of Suryoday Small Finance Bank.

He added that the traction in MSME and secured loans is expected to support consistent growth in the upcoming quarters.

Strategic Outlook

The bank aims to:

• Grow its Vikas Loan (individual loans in inclusive finance)
• Deepen its deposit base and digital distribution
• Leverage credit protection mechanisms and data-driven lending

Company Overview

Suryoday Small Finance Bank is a scheduled commercial bank that began operations as an SFB on January 23, 2017. It focuses on serving unbanked and underbanked customers with a pan-India presence through 710 banking outlets. The bank is listed on both NSE and BSE and is recognised for strong yields, return ratios, and operational efficiency.

REF:https://nsearchives.nseindia.com/corporate/SURYODAY_24072025200637_SSFB_Intimation_Press_Release_Financial_Results_Q1_FY26_Signed.pdf

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