Ujjivan SFB PAT Triples YoY to ₹365 Cr as Credit Costs Normalize, Margins Expand

Ujjivan Small Finance Bank's standalone net profit for Q2 FY27 came in at ₹365.05 Cr, up 200% YoY from ₹121.72 Cr and 15.3% QoQ from ₹316.54 Cr — a result that cleared the bank's own pre-result expectation of ₹80-110 Cr PAT by 3-4x and validates the Street's unanimous Buy stance (18 analysts, consensus target ₹80.65, implying 17% upside from ₹61.45 at the time). Total income rose 28.0% YoY and 6.3% QoQ to ₹2,448.94 Cr, with interest earned (the core revenue line) at ₹2,153.36 Cr. No external brokerage PAT estimate specific to this print could be located as of publication — the beat read is against our own pre-result range and against the broad optimism embedded in Street's target price, both of which the quarter comfortably cleared. The scale of the YoY jump is explained almost entirely by credit-cost normalization rather than a one-off: provisions and contingencies fell to ₹102.97 Cr from ₹234.96 Cr a year ago (-56%) and from ₹127.32 Cr last quarter (-19%), as gross NPAs improved to 2.10% of advances (from 2.45% YoY, 2.16% QoQ) and net NPAs fell to 0.31% (from 0.67% YoY). This was exactly the watch item we flagged pre-result — credit cost normalization — and it materialized cleanly: annualized credit cost works out to roughly 0.98% of average advances, inside management's revised FY27 guidance band of 0.9-1%. Margins expanded alongside: net profit margin rose to 14.91% of total income (from 6.28% YoY, 13.88% QoQ) and operating margin (operating profit/interest earned) to 27.57% (from 23.49% YoY, 27.07% QoQ), continuing the sequential expansion seen since Q1. Against the FY27 guidance management set on the July 2026 concall — 25% loan growth, secured mix to 56% by March 2027, ROA raised to 1.8-2%, and credit cost revised to 0.9-1% — the quarter tracks ahead: gross advances grew roughly 32% YoY (the bank's own provisional disclosure cites a ₹45,699 Cr gross loan book), above the 25% full-year target, and half-year return on assets reached 1.12% (not annualized) against 0.47% in H1 FY26, consistent with the upgraded ROA path; secured-mix progress toward 56% is not disclosed in this statement. Retail banking drove the result, contributing ₹481.00 Cr of segment profit before tax versus ₹91.32 Cr a year ago, while treasury and wholesale banking segments were comparatively flat to down. Carol Furtado, Interim CEO and Whole-Time Director, signed the results — the leadership continuity the Street had already treated as resolved pre-print; no separate management press release was available in our records to cross-check tone or framing this quarter. The same board meeting also approved a ₹409 Cr preferential issue, and the bank completed a ₹500 Cr direct assignment of assets on October 15, a day before results — capital and balance-sheet actions alongside, but not explained by, the profit print itself. Deposits grew 29.2% YoY to ₹50,643 Cr, broadly matching the bank's own pre-announced quarterly update, funding the loan book without a commensurate rise in the cost base — operating expenses rose 21.4% YoY (₹950.30 Cr vs ₹782.79 Cr) against 28% revenue growth, a sign of continuing positive operating leverage. Capital Adequacy Ratio stood at 20.69%, down marginally from 21.36% YoY, ahead of the ₹409 Cr preferential issue approved this quarter.