More Stories

Informist, Tuesday, Oct. 28, 2025

By Rati Chaphekar

MUMBAI – Analysts are divided on whether Equitas Small Finance Bank Ltd. will post a net profit or a net loss in the September quarter. The net interest income of the bank is expected to grow marginally due to lower credit growth in the September quarter, according to some analysts, while others expect the bank's net interest income to fall.

The bank is expected to post a net profit of INR 273.25 million for the reporting quarter, up 112% on year, according to the average of estimates from four brokerages that expect the bank to post a profit. The highest estimate for net profit is INR 459 million from Emkay Global Financial Services Ltd. and the lowest estimate is INR 3 million from JM Financial Institutional Securities Pvt. Ltd.

On the contrary, three brokerages expect the lender to post a net loss of INR 288.67 million, as per the average of these estimates. The lowest estimate for net loss is INR 123 million from YES Securities (India) Ltd. and the highest estimate is INR 557 million from Nirmal Bang Equities Pvt. Ltd.

The top line of the bank is expected to be around INR 7.77 billion, down 3% on year, according to the average of estimates from seven brokerages. The highest estimate for the net interest income of the bank is INR 8.12 billion from Kotak Securities Ltd. and the lowest estimate is INR 7.27 billion from ICICI Securities Ltd.

Analysts who expect the bank to make a net profit in the September quarter expect the profit to grow on year, primarily due to a low base. In the year-ago quarter, the lender had reported a 94% fall in its net profit due to a five-fold jump in its provisions.

Some analysts expect the lender to make a net loss in the reporting quarter due to the low growth in credit, dragging down the revenue and net profit growth of the bank. "Equitas SFB (Small Finance Bank) will report single-digit loan growth, of around 8.6% on year, while other SFBs will report double-digit loan growth," Nirmal Bang said. Emkay Global also expects the credit growth of the lender to remain sluggish in the reporting quarter, which will weigh on the net interest income and net profit of the bank.

The bank's operating profitability will remain under pressure and is expected to be down 20% on year, and provisions are expected to see an on-year decline due to a high base, Kotak said. The net interest margin will also remain under pressure and will be low due to a shift in loan mix, the brokerage said.

The lender's net interest margin is expected to decline to 6%, down 25 basis points on quarter, but the loan growth is likely to rise slightly to 7% on year, Motilal Oswal Financial Services Ltd. said. "In case of Equitas SFB, loan growth saw some improvement from 7.9% on year in Q1 (Apr-Jun) to 8.6% on year in Q2 (Jul-Sept) which we believe may be supported by resumption of MFI (mutual fund institutes) lending in a calibrated manner," Nirmal Bang said in a report.

Slippages are expected to be moderate on quarter though they will remain elevated, Emkay Global said. The bank's earnings before interest, tax, depreciation, and amortisation are expected to plunge more than 25% on year, the brokerage said. 

The lender's loan growth is expected to fall to more than 6% in the September quarter, nearly one-third of the loan growth of 18% it had reported in the same quarter last year, Kotak said. Similarly, the deposit growth of the bank is also seen slipping to 10% in the reporting quarter, again almost one-third of the 29% growth it had reported in the year-ago quarter, Kotak said.

The bank will announce its quarterly earnings Friday. Analysts will keenly watch management commentary on asset quality and business momentum of the bank.

Of the 10 brokerage reports on the company available with Informist, five have a "hold" recommendation on the stock with an average target price of INR 67. Four brokerages have a "buy" recommendation and one brokerage has a "sell" recommendation for the stock.

At 1030 IST, shares of Equitas Small Finance Bank traded at INR 60.68 on the National Stock Exchange, up nearly 2%. The stock has risen nearly 7% since the announcement of its June quarter earnings on Aug. 8.

Following are the Jul-Sept earnings estimates, in INR million, for Equitas Small Finance Bank from seven brokerage firms, in descending order of the net profit/loss estimates:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.