Equitas Small Finance Bank (EQUITASBNK) investor relations material

Executive summary

• Gross advances grew 27% year-over-year to INR 47,641 crore, with strong disbursement across asset classes and robust growth in used commercial vehicles and used cars at 25% and 30% respectively.

• Profit after tax was INR 184 crore, compared to a loss of INR 224 crore in the same quarter last year; net profit for Q1 FY27 reached ₹18,361 lakh.

• Asset quality improved, with gross NPA at 2.36% (down 13 bps QoQ) and net NPA at 0.70%; gross NPA ratio improved to 2.42% from 2.92% YoY.

• Deposits increased 10% year-over-year and 5% sequentially to INR 48,976 crore, with CASA ratio at 25% and retail deposits comprising 65% of the base.

• Strategic focus on digital transformation and operational efficiency continues.

Financial highlights

• Net interest income for the quarter was INR 1,030 crore, other income INR 250 crore, and total net income INR 1,280 crore, up 19% year-over-year and 3% quarter-on-quarter.

• NIM for Q1 FY27 stood at 7.24%, down 12 bps QoQ due to higher funding costs.

• Operating expenses were INR 875 crore, up 16% YoY and 5% QoQ; cost to assets declined to 5.61% from 5.75% QoQ.

• Cost to income ratio was 68.38% in Q1 FY27, compared to 67.52% in Q4 FY26 and 70.62% in Q1 FY26.

• Return on assets (ROA) was 1.18% and return on equity (ROE) was 11.76% for the quarter.

Outlook and guidance

• Advances growth guidance for FY27 remains at 20%+; management confident of exceeding this based on Q1 momentum.

• Full-year ROA guidance is 1.2%, with an exit ROA of 1.5% by Q4; management expects actual ROA to surpass guidance and will update after Q2.

• NIM expected to moderate to around 7.1% in coming quarters due to rising cost of funds.

• Credit cost expected to remain steady or improve slightly, targeting below 1.37% for the year.

• No material deviation in the use of proceeds from NCDs; all funds were used as intended.