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Equitas Small Finance Bank Ltd
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NSE: EQUITASBNK BSE: 543243 INE063P01018 Financial Services Bank 🔎 Screen
Microcap 250
₹8,302 Cr
Market Cap
1.67
P/B
7.29%
NIM
1.7%
ROE
2.49%
GNPA
-5.5%
Fin. Margin
+13.5%
% from 52W High
77
α RS
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📈 Price History
Ratio Health
— Excellent
— Good
— Average
— Poor
By Category
Shareholding
About

Equitas Small Finance Bank Ltd before acquiring small bank license, operated as a wholly-owned subsidiary of Equitas Holding Ltd. The holding entity started its operations in 2007 in the microfinance segment & diversified into vehicle & housing finance in 2011. Also entered into SME & LAP in 2013. It merged with the other two subsidiaries named Equitas Microfinance Ltd & Equitas Housing Finance Ltd & formed a bank. After receiving a license in Sept 2016 the company commenced operations under Equitas small finance Bank.

✓ Strengths 1
  • Company's median sales growth is 23.0% of last 10 years
! Concerns 3
  • Company has low interest coverage ratio.
  • Company has a low return on equity of 5.93% over last 3 years.
  • Earnings include an other income of Rs.1,037 Cr.
Key Ratios Snapshot
📊 Sector Averages
📈 Growth Pattern
📊 Quick Scorecard
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3-Statement Financial Model
Bear / Base / Bull projections · DCF fair value · Reverse-DCF
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Mixed: Strong asset growth and deposit franchise, but elevated credit costs due to proactive provisioning for universal bank eligibility weigh on near-term earnings. quarter Investor Presentation One-Pager? Jun 2026
Cost of Funds
6.69%
FY26 annual; landed cost of funds expected to decline over 3-5 years
What Went Right
  • Deposit franchise strong: CAGR of 42% between FY17-FY26, reaching ₹46,533 Cr.
  • Secured book constitutes 88% of advances, providing portfolio stability.
  • Small Business Loans have maintained average credit cost of ~0.66% over 8 years, below 1% despite one-time FY26 spike.
  • Gold loan portfolio identified as strategic focus, with planned expansion to ~700 asset branches.
  • Digital collections maintained at ~60% of monthly average over last 2 years; bounce rates for SBL reduced from ~33% to ~29%.
What to Watch
  • Credit costs elevated in FY26: SBL 1.25%, VF 4.49%, HF 0.86% due to one-time strengthening of provisioning norms for universal bank eligibility.
  • Microfinance portfolio still at ~10% of advances (₹5,756 Cr), carrying higher event and political risk despite reduction from 46% in FY17.
  • Cost of funds at 6.69% remains high relative to large banks, though expected to decline as liability franchise scales.
  • Branch network concentrated in Tamil Nadu (45.29% of branches), though diversification is underway with ~90% of new branches outside TN.
  • Bounce rates for SBL product still high at ~29%, requiring ongoing collection investments.
Management Guidance
  • Landed cost of funds expected to be lower than AAA-rated NBFCs over a medium term of 3-5 years.
  • Existing branch network has enough runway to support growth with minimal network expansion over next 2-3 years.
  • Housing Finance to be expanded through 60 additional SBL branches in FY27, from current 90 branches.
  • Microfinance & microloans portfolio to be maintained at ~10% of advances going forward.
Investor Lens
Equitas's long-term thesis as a niche bank serving semi-formal/informal segments remains intact, supported by proven underwriting and deposit growth. However, near-term earnings are pressured by proactive provisioning to meet universal bank eligibility (PCR target >65%, Net NPA <1%). The bank's secured book (88%) and conservative product mix mitigate downside, but credit costs may stay elevated until provisioning normalizes. Key watch items: trajectory of cost of funds (currently 6.69%) as liability franchise deepens, and ability to sustain growth without diluting underwriting standards, especially in vehicle finance (credit cost 4.49% in FY26). The massive ₹84 lakh crore addressable credit gap provides structural tailwinds, but execution on branch productivity and product diversification outside Tamil Nadu will be critical.
From investor presentation · AI-generated analysis · Not investment advice
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📊 MIXED Profit up 182% YoY to ₹184 Cr; margins compress, QoQ down 13.6%
Revenue
Revenue grew 18.9% YoY to ₹1,960 Cr, with sequential growth of 6.8%. Strong top-line expansion likely driven by loan growth.
Profitability
Net profit surged 182.1% YoY to ₹184 Cr, though QoQ declined 13.6%. EPS stood at ₹1.61, while ROE was low at 1.69%, indicating capital inefficiency.
Margins
Financing margin contracted sharply by 36% YoY, reflecting severe NIM compression. QoQ improvement of 1% offers little near-term relief.
Cash Flow
Skip — not applicable for banking/financial companies.
Balance Sheet
Balance sheet details on deposits, advances, and capital adequacy are not disclosed in the provided data. Low ROE of 1.69% hints at weak capital efficiency.
Key Risks
Severe NIM compression (margin -36% YoY); QoQ profit decline; low ROE suggests asset quality or funding cost pressures. Regulatory shifts for small finance banks add uncertainty.
Outlook
Sustained revenue growth may continue, but margin pressure could cap profitability. Asset quality and cost control will be critical for improving ROE.
Generated by AI · Jun 2026 results · Not investment advice
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