Equitas Small Finance Bank Reports Strong Credit Growth and Improving Asset Quality

Equitas Small Finance Bank Limited has released its provisional business update for the quarter and financial year ended March 31, 2026. The bank demonstrated robust momentum in its lending operations, characterized by a significant surge in disbursements and a marked improvement in the collection efficiency of its microfinance portfolio.

The bank's Gross Advances reached ₹46,183 crore, reflecting a strong 21.58% Year-on-Year (YoY) growth. This expansion was powered by record quarterly disbursements of ₹7,347 crore, which grew by over 72% compared to the same period last year. Notably, the bank's loan book remains heavily titled toward secured assets, which constitute 90% of the portfolio (excluding Direct Assignment assets).

Key Financial Highlights

Lending Momentum: Gross Advances grew 6.74% Quarter-on-Quarter (QoQ). Microfinance and Micro Loans saw the highest growth at 27.18% YoY.

Deposit Base: Total Deposits increased to ₹46,533 crore, a growth of 7.96% YoY. However, the CASA (Current Account Savings Account) ratio saw a decline to 26%, down from 30% in the previous quarter.

Cost of Funds: A positive highlight was the consistent reduction in the cost of funds, which dropped to 6.93% in March 2026 from 7.54% in September 2025.

Credit-to-Deposit (CD) Ratio: The CD ratio stood at 93.69%. When adjusted by reducing refinance borrowings from advances, the ratio was a more comfortable 83.44%.

Asset Quality Trends in Microfinance

The bank reported a significant turnaround in its Microfinance and Micro Loans segment. Management indicated that "the worst is behind us" as several key metrics showed a return to normalcy:

Collection Efficiency: The X-bucket (current accounts) collection efficiency reached 99.71% in Q4FY26.

Slippages: Fresh Overdue (OD) slippages fell to their lowest level of ₹9 crore in March 2026, down from ₹97.48 crore in April 2025.

1-90 DPD: The 1-90 Days Past Due (DPD) amount consistently reduced to ₹67 crore (1.43%) as of March 31, 2026.

Note: These figures are provisional and subject to audit by the Statutory Auditors and approval by the Board of Directors.

Shares of Equitas Small Finance Bank Limited was last trading in BSE at Rs. 54.24 as compared to the previous close of Rs. 53.53. The total number of shares traded during the day was 98555 in over 1176 trades.

The stock hit an intraday high of Rs. 54.76 and intraday low of 51.68. The net turnover during the day was Rs. 5204681.00.

Source : Equity Bulls

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EquitasSmallFinanceBank INE063P01018 BusinessUpdates FY2026 Q4FY26