Transcript of the Earnings Call held on May 11, 2026
UTKARSHBNK · price
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Utkarsh Small Finance Bank reported a Q4 FY '26 net loss of INR188 crores driven by provisioning for legacy stress, though green shoots emerged with fresh NPA slippages falling sharply to ~INR170 crores from ~INR710 crores YoY. The GNPA ratio improved 330bps QoQ to 7.7% as of March 2026. Disbursements rebounded strongly with JLG growing 58% QoQ and non-JLG growing 41% QoQ. The bank is executing a strategic pivot: JLG exposure reduced to ~28% of gross loan book (from 88% in March 2020) while secured lending increased to 51%. Collection efficiency reached 99.7% in March 2026. Cost of funds declined to 7.9% from 8.3% YoY. The bank raised INR950 crores via rights issue in November 2025. Management guided for 25%-30% loan book growth, NIMs above 8%, and ~15% ROE, with credit costs expected at 3%-3.5% in FY '27 and net NPA targeting below 1% by FY '28.
The bank is recovering from legacy stress with improving asset quality and portfolio diversification. The strategic shift toward secured lending and operational improvements should support margin stability and profitability recovery toward 15% ROE by FY '28.