Equitas Small Finance Bank Reports Strong Q2FY26 PAT Growth, Advances Up 9% YoY
Equitas Small Finance Bank reported 87% YoY PAT growth to ₹24 crore and 9% YoY gross advances growth to ₹39,123 crore for Q2FY26. Asset quality improved, and the bank targets mid-teen advances growth for FY26.
This announcement includes the bank's quarterly financial performance, key operational metrics, strategic initiatives, and future guidance. These details are critical for investors to assess the bank's current health and future prospects, leading to a high market impact.
The bank reported significant PAT growth, strong advances and deposit growth, and improved asset quality with a notable reduction in credit cost. The strategic actions in microfinance and secured loans, alongside a positive outlook for FY26 including an expected 1% exit RoA, indicate a positive sentiment despite a decline in NIM.
* Equitas Small Finance Bank Limited announced its unaudited financial results for the quarter and half year ended September 30, 2025 (Q2FY26) through an investor presentation. * Financial Performance (Q2FY26 vs Q2FY25): * Profit After Tax (PAT) grew by 87% year-on-year (YoY) to ₹24 crore (Q2FY25: ₹13 crore). * Gross Advances increased by 9% YoY to ₹39,123 crore (Q2FY25: ₹36,053 crore). * Total Deposits grew by 11% YoY to ₹44,094 crore (Q2FY25: ₹39,753 crore). * Net Interest Margin (NIM) declined to 6.29% from 7.69% in Q2FY25, primarily due to a drop in the MFI portfolio. * Return on Assets (RoA) improved to 0.18% (Q2FY25: 0.11%) and Return on Equity (RoE) to 1.65% (Q2FY25: 0.86%). * Cost of Funds reduced by 14 basis points (bps) during the quarter, reaching 7.35% (Q2FY25: 7.50%). * Asset Quality: * Gross Non-Performing Assets (GNPA) remained flat quarter-on-quarter (QoQ) at 2.82% (Q1FY26: 2.82%). Including the securitization book, GNPA stood at 2.77%. * Net Non-Performing Assets (NNPA) also remained flat QoQ at 0.95% (Q1FY26: 0.95%). * Provision Coverage Ratio (PCR) was 66.93% (Q1FY26: 67.03%). * Credit Cost significantly improved to 2.16% in Q2FY26 from 6.48% in Q1FY26 and 3.72% in Q2FY25. * The bank sold NPA assets (Secured Portfolio) amounting to ~₹216 crore to an Asset Reconstruction Company (ARC) during Q2FY26. * Strategic Actions & Outlook: * Microfinance (MFI) disbursements grew by 156% QoQ to ₹682 crore, with all new MFI disbursements from August 2025 aligned to a monthly repayment mode. * Expanded footprint for Small Business Loans (SBL) by adding ~60 new branches across several states. * Targeting mid-teen growth in overall advances for FY26, primarily driven by the secured (non-MFI) portfolio. * Expects to achieve an exit RoA of about 1% in Q4FY26. * Cost to Income is expected to moderate in H2FY26, and credit cost is expected to taper down by Q4FY26.
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Equitas Small Finance Bank Limited filed this with the NSE as a statutory disclosure, categorised under investor presentation. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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