Equitas Small Finance Bank (EQUITASBNK) Q3 25/26 earnings summary

Executive summary

• Achieved highest ever quarterly disbursements at Rs. 6,557 Cr in Q3FY26, up 28% YoY and 22% QoQ, with robust growth in both MFI and non-MFI segments.

• Gross advances rose 16% YoY to Rs. 43,268 Cr, with strong growth in housing, MSE, and gold loans.

• Net profit (PAT) for Q3FY26 was Rs. 90 Cr, up 36% YoY and 273% QoQ, despite a one-time provision of Rs. 29.52 Cr for new labor code implementation.

• Initiatives in microfinance, new customer acquisition, and improved lending discipline led to significant performance improvements, with ex-bucket collection efficiency at 99.4% in December and a sharp reversal in NPA slippages.

• Unaudited financial results for the quarter and nine months ended December 31, 2025, were approved by the Board and reviewed by statutory auditors with an unmodified report.

Financial highlights

• Net interest income for Q3 FY26 was INR 852 crore; other income was INR 285 crore, totaling INR 1,137 crore (up 8% YoY, 14% QoQ).

• PAT stood at INR 90 crore, up 36% YoY and 273% QoQ, after a one-time INR 29.5 crore labor law provision.

• NIM improved 43 bps QoQ to 6.72%.

• Gross NPA reduced 20 bps QoQ to 2.62%; Net NPA down 7 bps to 0.88%.

• Credit cost declined to 1.88% from 2.16% QoQ and 2.65% YoY.

• Total income for the quarter ended December 31, 2025, was ₹1,98,113.42 lakh, up from ₹1,84,629.26 lakh in the previous quarter.

• Operating profit before provisions and contingencies for the quarter was ₹30,717.96 lakh.

Outlook and guidance

• Guided for 1% exit ROA in Q4 FY26 and 1.5% exit ROA for Q4 FY27.

• Advances growth target of 15% for FY26 (excluding DA), with historical growth rates of 20-25% expected to resume in FY27.

• Credit cost expected to further decline, with Q4 FY26 below 1.5% and FY27 in the 1.5-1.7% range.

• NIM expected to remain stable or marginally improve, supported by lower cost of funds and stable MFI mix.

• The impact of new labour codes has been provisioned, with further assessment pending final rules and industry practices.