Guidance cut 40bps; strategy intact, execution headwinds bite

Delivered ₹502 Cr, 34.9% YoY vs ₹371 Cr in Q1FY26—matches call claim closely

NIM held stable at 6.2%, no improvement vs prior guidance for 10–20 bps gain; actual shows compression vs expected

Gross advances ₹1.56 lakh Cr, 16% YoY growth and 1% QoQ; non-EEB 27% growth confirmed—within guidance

Revised down to 1.2–1.4% due to external factors; Q1 ROA 1.0%, clearly below path to prior target; misses old guidance

EEB slippages ₹604 Cr, down from ₹690 Cr in Q4; but EEB book flat YoY and SMA-0 at 3.5% (up from 3.1%), partly seasonal

Retail deposits (CASA + retail term) grew 16% YoY; CASA ratio improved to 29.4%—supports claim

Savings bank deposit costs up 20–25 bps QoQ already; funding cost pressure explicit reason for NIM guidance revision from 6.5% target to maintenance at 6.2%; contradicts prior comfort

From 1.6–1.8% (prior guidance) to 1.2–1.4% by Q4FY27. Primary drivers: NIM compression (30 bps) from deposit rate inflation despite stable repo; opex pressure (10 bps) from tech cost inflation (+65% YoY).

Earlier guided for 10–20 bps improvement to 6.5% by Q4FY27. Q1 flat at 6.2%; now expect to maintain, not expand, due to durable liquidity shortage forcing deposit rate hikes. Cost of funds up 20–25 bps QoQ already.

Earlier 14–15% credit growth aspiration; now 5–10% EEB growth (vs 20%+ non-EEB) to manage risk amid energy crisis. Q1 EEB flat YoY; strategic pivot to secured lending emphasizes margin preservation over growth.

IT costs now 9.5% of opex (up from 5–6% prior years); +65% YoY growth. Management defends investments (LOS, credit card, products) but acknowledges 18+ months before payoff. Opex guidance already slipping to 4.3% vs 4.2% target.

Purely external: energy crisis impact, funding cost pressure, tech cost inflation. Credit cost actually improving, asset quality stable. No internal concern.

Cannot rely on FCNR; durable liquidity shortage real. Already up 20–25 bps on deposits QoQ. Best case: hold 6.2%. No confidence in expansion even if macro improves.

Hiked 100 bps in Feb 2026 (Q4FY26). Now paused; focus on quality, not growth. Intentionally cautious on EEB given external risks.

Largely seasonal: April holidays (3 days), West Bengal elections, EMI collections lagged but repayments ongoing. No structural deterioration; forward slippage arrested. June collection efficiency back to 99%.

Credit cost already moderating (1.8% vs 2.0%); recoveries and upgrades stronger. Guidance holds 1.6–1.8% but EEB growth capped as insurance.

Tech investments (LOS, credit card) still in build phase. Cost-to-income stuck at 62% until FY28+. After 2 years (beyond FY28), returns materialise.

Entry via low-margin advances; goal is wallet-share for other income (FX, cash mgmt, LCs). Mix building now; returns lag but long-term diversification critical.

We lead MFI and will stay leader. 5–10% is bandwidth, not ceiling. Will grow to 10% if environment improves. Book stays 33% of portfolio.

₹120 Cr ARC recovery one-off from housing portfolio sale. Underlying credit cost will continue to improve, not slow.

Q1 delivered 16% overall, 27% non-EEB, flat EEB. On track but EEB caution flags headwind to full-year blended target.

Deposit rate competition, durable liquidity shortage will pressure NIM. Cost of funds up 20–25 bps QoQ already. Guidance reversed from expansion to maintenance.

LOS, credit card, CRS build-outs non-negotiable. Payoff delayed to FY28+ but commitment firm.

Savings bank deposit costs already up 20–25 bps QoQ; durable liquidity shortage (~₹1 Tr vs ₹2.5 Tr need) forcing rate hikes across industry. NIM target 6.5% abandoned; now defending 6.2%. Material headwind to profitability.

IT costs +65% YoY (now 9.5% of opex, up from 5–6%). Supply chain constraints from Middle East conflict, chip price inflation. Management expects payoff 18+ months out (beyond FY28). Cost-to-income stuck 62%; target 55% by FY28 now pushed to FY28+.

EEB book flat YoY in Q1; management explicitly cautious due to energy crisis impact on low-income borrowers. Even after 100 bps yield hike in Feb 2026, no aggressive growth. SMA-0 at 3.5% (up from 3.1%) due to April seasonality, but forward indicators unclear.

ROA guidance cut 40 bps from 1.6–1.8% to 1.2–1.4% by Q4FY27. Q1 ROA 1.0%. Path to even revised target (1.2–1.4%) contingent on external factors (funding cost stabilization, tech payoff) largely outside management's control. Credibility rating B (mixed prior track record).

Wholesale banking 38% YoY growth but margins inherently dilutive (0% ROA per management comments). Competition from larger banks and consortium lending forces rate compression. Goal is wallet-share (fees), but NII contribution weak.