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Informist, Thursday, May 7, 2026

By Shumaila Firoz

MUMBAI – Ujjivan Small Finance Bank Ltd. is expected to report a nearly threefold on-year rise in its net profit for the March quarter, driven by robust loan growth, improved margins, and better asset quality. Moderation in credit costs is also likely to support the bank's net profit. The bank's net interest income is expected to increase on both a yearly and sequential basis, supported by better business momentum and expansion in net interest margins, according to brokerages tracking the bank. 

The small finance bank is expected to report a net profit of INR 2.46 billion for the reporting quarter, up nearly 195% on year and over 32% sequentially, according to the average of the estimates of seven brokerages. The company is expected to report a net interest income of INR 10.86 billion for the March quarter, up nearly 26% on year and nearly 9% sequentially, according to the average of estimates.

The highest estimate for the bank's net profit is INR 2.66 billion by Emkay Global Financial Services Ltd., and the lowest is INR 2.29 billion by Kotak Securities Ltd. The highest estimate for net interest income is INR 11.01 billion by YES Securities (India) Ltd., and the lowest is INR 10.59 billion by Kotak.

The bank is scheduled to detail its March quarter earnings on Friday.

The Bengaluru-based bank's net profit is expected to be supported by strong loan growth, particularly in the microfinance segment, and expansion in the secured portfolio. "Loan growth is expected to be very strong at ~22% yoy, driven by a revival in MFI (Microfinance Institutions) group loans and expansion of the secured book," Equirus Securities Pvt. Ltd. said. Elara Securities (India) Pvt. Ltd. also expects momentum to be better. "We expect better business momentum with 5%-plus QoQ (quarter-on-quarter) loan growth," it said.

The bank's net interest margin is expected to improve sequentially, supported by a decline in the cost of deposits and a favourable shift in loan mix. Kotak Securities said, "NIM (net interest margin) is expected to improve qoq (quarter-on-quarter) by ~10 bps with continued decline in cost of deposits and lower impact from slippage-related interest reversals and loan mix shift."

Asset quality is expected to improve during the quarter, led by lower slippages and better collection efficiency in the microfinance portfolio. "We expect qoq (quarter-on-quarter) improvement in asset quality led by lower slippages and improved collection efficiency in microfinance. Credit cost is likely to decline to near-normalized level," Kotak said. Equirus also expects credit cost to decline sequentially alongside an improvement in profit at risk or slippages. "We expect credit costs to decline sequentially alongside an improvement in PAR/slippages," as per Equirus' report. 

In April, the small finance bank's application for a universal banking licence had been rejected by the Reserve Bank of India, as per its exchange filing. The RBI had advised the bank to reapply for a universal banking licence after demonstrating a more diversified loan portfolio.

On Thursday, shares of Ujjivan Small Finance closed at INR 62.67 on the National Stock Exchange, down marginally. The stock has risen over 1% since the company announced its December quarter earnings on Jan. 22.

All seven brokerage reports on the bank available with Informist have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 71 per share. This is over 13% higher than the current market price. 

Following are the March quarter earnings estimates for Ujjivan Small Finance Bank Ltd. from seven brokerage firms in descending order of the estimate of net profit in INR billion:

End

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

Edited by Avishek Dutta

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