Earnings Review
Equitas Small Fin Bk Q3 PAT up 36% YoY on lower provisions
This story was originally published at 17:18 IST on 29 January 2026
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--Equitas Small Finance Bank Oct-Dec net profit INR 900.28 mln
--Analysts saw Equitas Small Finance Bank Oct-Dec net profit INR 800 mln
--Equitas Small Finance Bank Oct-Dec total income INR 19.81 bln
--Equitas Small Fin Bk Q3 total income INR 19.81 bln vs INR 18.50 bln yr ago
--Equitas Small Fin Bk Q3 net profit INR 900.28 mln vs INR 663.02 mln
--Equitas Small Fin Bk Q3 provisions INR 1.93 bln vs INR 2.43 bln year ago
--Equitas Small Fin Bk gross NPA ratio 2.75% as on Dec 31 vs 2.92% qtr ago
--Equitas Small Fin Bk net NPA ratio 0.92% as on Dec 31 vs 0.98% qtr ago
--Equitas Small Fin Bk capital adequacy ratio Basel-II 20.47% as on Dec 31
--Equitas Small Fin Bk Apr-Dec net loss INR 1.10 bln vs profit INR 1.05 bln
--Equitas Small Fin Bk Apr-Dec total income INR 57.68 bln vs INR 53.54 bln
By Durgesh Nandan
MUMBAI – Equitas Small Finance Bank Ltd. reported a double-digit on-year rise in net profit for the December quarter, primarily supported by lower provisions and rise in other income. The bottom line rose nearly four-fold from the previous quarter. The bank's net profit exceeded the Street's estimates by a wide margin.
The bank's bottom line for the reporting quarter rose nearly 36% on year to INR 900.28 million. Sequentially, the lender's net profit rose more than 273%. According to the average of estimates from six brokerages, the bank's net profit for the quarter was expected to be INR 800 million.
Equitas Small Finance Bank's provisions and contingencies for the December quarter fell more than 20% on year and nearly 7% on quarter to INR 1.93 billion.
The lender's gross non-performing asset ratio as on Dec. 31 was 2.62%, down from 2.82% a quarter ago. The bank's net non-performing asset ratio was 0.88% as of Dec. 31, down from 0.95% a quarter ago. The lender's Basel-II capital adequacy ratio as on Dec. 31 was 20.47%.
The bank's secured business loans, which are a part of small business loans, grew 22% from a year ago, accounting for 32% of the overall small business loans portfolio. The bank's disbursements in Oct-Dec were the highest-ever at INR 65.57 billion, up 28% on year and 22% on quarter. Overall, its gross advances rose 16% on year to INR 432.68 billion.
The bank's total income for the December quarter rose over 7% on year to INR 19.81 billion. Other income rose over 21% on year to nearly INR 3 billion. Sequentially, the other income rose over 26%. Net interest income--interest earned minus interest expended--rose 4% on year and 10% on quarter to INR 8.52 billion. A year ago, the net interest income was INR 7.73 billion. The private sector bank's net interest margin for the quarter was 6.52%, up 43 basis points on quarter. The bank reported a significant expansion in net interest margin due to increase in interest income from advances from a quarter ago, it said.
The bank's overall deposits rose 7% year on year in the December quarter. Current account savings account ratio remained stable at 30%. Its total operating expenditure rose 16% on year to INR 8.29 billion during the quarter.
The cost of funds fell to 7.13% from 7.35% from the trailing quarter. Interest expenses were lower because of a fall in the cost of funds from 7.35% in Jul-Sept to 7.13% in Oct-Dec, the bank said in its investor presentation.
After assessing the impact of the new labour codes, the bank has made an incremental provision of INR 2.95 million under 'Employees cost' for the December quarter. The bank raised INR 5 billion of tier II capital during the nine months ended Dec. 31.
For the nine months ended Dec. 31, the bank reported a loss of INR 1.10 billion against a net profit of INR 1.05 billion a year ago. Total income for the nine-month period rose nearly 8% to INR 57.68 billion. The earnings were announced during market hours Thursday. Shares of Equitas Small Finance Bank closed 0.2% higher at INR 69.62 on the National Stock Exchange. End
Edited by Ashish Shirke
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