Strong credit & asset quality, but revenue growth masks macro headwinds

Beat on advances (17.97% vs 10-12%), deposits (11.63% vs 9-10%), NPA metrics; missed on CASA (29.70% vs 30-32% target)

Delivered ₹4,864.1 Cr net profit with 62% YoY growth; 2.19% refers to EPS growth, not PAT

NII growth of 13.39% YoY verified; strong core interest income

Delivered 0.49% credit cost vs 0.75% guidance; 23 bps decline YoY verified

Treasury sales only ₹654 Cr vs ₹1,617 Cr Q1 FY26 (down ₹963 Cr YoY due to hardened yields)

Q1 FY27: ₹1,947 Cr; but Q1 FY26 was ₹1,684 Cr; Q2-Q4 typically ₹200-300 Cr only; seasonal peak

₹11K Cr sanctioned, ₹10K Cr disbursed in Q1 FY27. Not part of prior FY27 guidance; represents upside this quarter but will tail off.

Gross NPA 1.57% (vs 1.50% March 27 guidance) already achieved in Q1; Net NPA 0.36% (vs 0.40% target); improvement 112 bps & 27 bps YoY.

Maintained 2.50-2.60% guidance; Q1 at 2.52% (middle of band); no upgrade despite CASA miss and bulk deposit cost pressure (₹6.58%).

0.49% Q1 vs 0.75% FY27 guidance; 23 bps better YoY; sustained low credit cost despite higher slippage to SMA.

CASA 29.70% vs 30-32% target; management prioritizing growth over deposits now; reliance on bulk deposits at 6.58% cost.

3-4 consortium govt-guaranteed accounts oscillate SMA 0/1/2; one account now corrected. Total SMA <3%. ECLGS5: 90K Cr identified, 18K Cr positive, 11K Cr sanctioned, 10K Cr disbursed; 5-6K Cr more pipeline.

Treasury down ₹1k Cr vs Q1 FY26 (no RBI OMO, hardened yields). PSLC ₹1,947 Cr this year (vs ₹1,684 Cr last year) but Q1-specific, ₹200-300 Cr Q2-Q4. Provisions up 1.5K Cr (IT tax, PLI staff 300 Cr).

Efficiency first, growth second. CASA at 29.70% (vs peer 30-39%), dependency on bulk deposit (₹6.58%). Will replace through FCNRB (₹2.5B @ 6.50%), SV individual deposits (+12.48%), retail term (+9.10%). CD ratio 75→80; yield advances 8% vs investments 6.90%.

FCNR guidance 2.3-2.5B dollars; July 775M already raised, targeting 1B this month. NIM 2.50-2.60% guidance maintained, will try to better but ecosystem headwinds acknowledged. Incremental deposit cost declining 29-30 bps monthly.

Some sub-7% lending being repriced up on reset. Market improving in corporate; RAM mix up 58%→59%, better leverage, diversified risk, lower credit cost. Corporate book 86% A+ rated; getting good terms & quality.

IT refund ₹247 Cr (vs ₹619 Cr prior year, ₹382 Cr prior Q1). Recovery interest ₹258 Cr (vs ₹382 Cr prior Q1). No material one-offs; mostly organic.

No FY target; PSLC happens Q1 & little Q2. Already booked. March quarter only ₹393 Cr. ₹200-300 Cr Q2 spillover expected. Front-loaded to Q1.

100 bps repo cut transmission last year; 53% portfolio repo-linked. Yields largely stabilized now; depends on MPC. Repo cuts fully transmitted.

Efficiency focus: improve CASA (target 30-39% peer range), HR upskilling, ethics. Digital: 3K Cr+ earmarked (8% IT cost), AI investment calibrated. Gold: ₹2.59 lakh Cr (₹1.51 lakh agri, ₹1.07 lakh retail), LTV 60-65. Credit pipeline: 100 accounts, ₹50K Cr (45 accounts ₹18K Cr sanctioned undisbursed; 47 accounts ₹32K Cr in hand).

Both sides: deposit cost down 27 bps but yield down 29 bps; offset. CD ratio up 75→80; yield advances 8%, investments 6.90%, 110 bps lift. Targeting both sides. Repricing plateau; lag transfer always incomplete, banks fight on bulk deposit.

ECL: 1.2% RWA = ₹12-13K Cr; no hidden floating, PCR 95% covers SMA-0. Slippages ₹1,781 Cr total (₹727 agri, ₹697 MSME, ₹326 retail); 0.15% quarterly annualized 0.60%. Fee income: YoY +5.35% but YTD flat (₹2,342 Cr vs ₹2,513 Cr) due to Q4 seasonal items. Deposit target: 11%-12% growth aspired, CASA/bulk targets not quantified.

Run-rate increase: 4-5 bps only (not 10 bps). ₹10K Cr incremental provision on ₹12.83 lakh Cr book. Won't raise lending rates for 4-5 bps; market-driven. ROA target 1.01-1.02%+ acceptable.

If distress declared, RBI/SLVC dispensations apply; govt guarantee kicks in. KCC portfolio not huge. Crop insurance (Fasal Bima) available. Rain-fed areas declining. Manageable stress expected.

Q1 at 17.97% but ECLGS5-inflated by ~4.5%; organic likely 12-13%. Post-ECLGS5 tail-off expected Q2 onward.

Q1 business growth 14.37% YoY vs 10-11% guidance. Mix: advances 17.97%, deposits 11.63%; balanced growth.

Q1 at 2.52% (middle of band). Yield on advances 8%, cost of deposits stabilizing (bulk at ₹6.58%). Incremental deposit cost declining 29-30 bps monthly but offset by yield declines.

CASA miss (29.70% vs 30-32% guidance); FCNRB ₹2.3-2.5B mobilization and individual deposit growth (+12.48%) are mitigation levers, not yet sufficient.

250 new branches planned (34 opened so far); branch decongestion and digital adoption focus; AI rollout consolidated, not piecemeal.

ECL transition (Apr 2026, implementation by Apr 2027) requires ₹10-12K Cr additional provision. One-time capital hit 1.2-1.25%. MD plans 2-year absorption (vs 5-year dispensation) to demonstrate preparedness.

CASA at 29.70% (vs 30-32% guidance, peer 30-39%) forces reliance on bulk deposits at ₹6.58% cost. Yield on advances down 29 bps despite RAM mix up; spread pressure ongoing.

SMA 2 accounts rose ₹1,394 Cr → ₹3,482 Cr (up 2,088 Cr); SMA 0 rose 862 → 3,315 Cr. While MD attributes to 3-4 govt-guaranteed consortium accounts oscillating, the trend bears monitoring. Agriculture & MSME slippages ₹727 Cr + ₹697 Cr (₹1.4K Cr combined).

Aggregate revenue growth 4.5% YoY (₹32,957.2 Cr) is weak. NII +13.39% masks PSLC income seasonality (₹1,947 Cr Q1 only, ₹200-300 Cr Q2-Q4), treasury income collapse (down ₹963 Cr YoY), and fee income stalling (5% growth, QoQ down YTD).

₹11K Cr ECLGS5 sanctioned, ₹10K Cr disbursed in Q1 inflates credit growth to 17.97%. Post-Q1, scheme flows normalize; organic growth likely reverts to 12-13% (closer to 11-12% guidance).