Utkarsh Small Finance Bank Limited has informed the Exchange regarding Outcome of Board Meeting held on May 03, 2025.
UTKARSHBNK · price
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Utkarsh Small Finance Bank reported audited Q4 and FY25 results (year ended March 31, 2025) with joint statutory auditors (Deloitte Haskins & Sells, Kirtane & Pandit LLP) issuing an unmodified opinion. Total income grew about 22% YoY to Rs 4,364.76 crore from Rs 3,578.76 crore, and deposits rose 23% to Rs 21,565.70 crore. However, net profit collapsed to just Rs 3.95 crore in FY25 from Rs 497.63 crore in FY24, a drop of over 99%, as the bank fully utilised its floating provisions (Rs 148.62 crore) and stepped up NPA provisions. Asset quality weakened sharply, with Gross NPA rising to 4.84% (from 2.50%) and Net NPA to 0.72% (from 0.03%). The bank also changed its accounting policy to recognise loan processing fees as income when due (instead of over the loan tenure), which boosted Q4 FY25 profit before tax by Rs 94.57 crore. New joint statutory auditors (M. M. Nissim & Co LLP and KKC & Associates LLP) and a new secretarial auditor (BNP & Associates) were appointed, replacing the existing ones on completion of tenure.
Despite strong top-line growth, the near-total collapse in profit and sharp rise in NPAs are significant red flags for shareholders. The accounting policy change inflated Q4 earnings, so underlying profitability is even weaker than reported. The stock is likely to react negatively given the deterioration in asset quality and earnings.