Strong PAT growth masks soft revenue; margin expansion capped by competition

Delivered PAT ₹1,071.8 Cr, YoY growth 32.5%

Headline 18.3%, but management clarified average balance 15-16%; transitional corporate growth inflates point-to-point

NIM 2.7% held flat Q-o-Q; margin expansion cautioned as 'steady climb' not straight-line, rate cuts on par, deposit competition intense

SR gains down 75% vs Q1 FY26 (₹338 Cr); management candid on J.C. Flower timing volatility; guidance caveated

Retail advances only 6.9% YoY; management acknowledges run-off lag, expects 3-4Q before disbursement momentum reflects in book

0.9% Q1 is below FY26 exit at 1% and below full-year aspiration; Q2-Q4 must strengthen sequentially

Prior guidance aspired 3.25-3.5% NIM medium-term; now 3%+ over 2 years, caveated as 'steady structural climb' not quarter-to-quarter. Rate cuts on par, deposit competition intense.

SR gains ₹86 Cr Q1 vs ₹338 Cr Q1 FY26 (-75%). Treasury income lower. Management reframes as core earnings engine taking over—healthy but implies reported earnings will moderate YoY.

Still targeting mid-teens by FY27 on disbursement momentum (27.5% YoY), but book growth remains flat-to-7% due to run-off. 3-4Q lag acknowledged.

Guidance for FY27 full-year ~1%, but Q1 came in at 0.9%. Q2-Q4 must strengthen sequentially. Management confident (15-20 bps core ROA expansion guidance) but not yet proven.

Retail slippages lowest in 10Q (1.4% gross vs 1.6% prior Q, 2.4% Q1 FY26). GNPA/NNPA at 1.3%/0.2%. Platform, scorecard, policy refresh yielding results.

Endeavor to grow at 15-17%, slightly above industry, in line with funding resources and liquidity comfort.

Strong demand on both pure deposits and leverage. Leverage at 9x currently, limits from international banks (including SMBC) being set for 3-5yr commitments. Global liquidity and geopolitical factors slow process; macro spreads higher.

Cost of Deposits down substantially since April (no attrition), better pricing power. Selecting higher-yield assets. North of 3% achievable by FY28. Structural climb, not straight-line given rate cuts now on par and deposit competition intense.

[Dr. Rajan Pental] Will definitely work on this suggestion. Acknowledged pain point.

On daily average balance basis, CD ratio stable (June vs March). Liability-led Balance Sheet expansion is core principle. Focus on CASA, branch-led retail deposits. Best cost-of-deposits outcome vs industry in 3 years.

Face value SR outstanding ₹1,500 Cr, NAV ₹2,000+ Cr. Recoveries unpredictable as function of J.C. Flower execution timing. Maintain FY27 guidance ₹800-1000 Cr but caveat it's contingent on J.C. Flower pace.

Interest on tax refund is part of Non-Interest Income, not NII. No adjustment to NII. NIM stable Q-o-Q.

Enabling resolution only, not event-triggered. 14% CET-1 is reasonable for next 4 quarters of growth. Can grow 12-13% RWA without capital consumption (due to DTA). When raised, will do in 13% CET-1 handle (vs prior 11%). No provision for court case as of now.

[Dr. Rajan Pental] Retail on strong wicket (slippages controlled, platform refreshed). Incremental fresh business growing 25-30% depending on segment. Portfolio was flat, takes time to reflect. Will reach mid-teens by FY27, yes.

Corporate resolutions behind us. J.C. Flower ARC is focus: ₹800-1000 Cr expected FY27. Retail recoveries now netted in NPA. Core ROA focus: expect 15-20 bps expansion FY27 plus external factors (bond, trading) should deliver 1% reported ROA.

Not yet publicly disclosed. ECL has offset from Security Receipts; if allowed, no net impact. But ECL adj for SR will flow through P&L (not Balance Sheet). New credit RWA circular also coming Apr 1. Combined, impact expected immaterial on core equity. Will disclose later.

[Manish Jain] Portfolio of high quality, slippages controlled Q1. Very limited impact from West Asia war; clients managed crisis well.

Seasonality (March high, co-lending). Y-o-Y disbursement growth ~30%. Multi-product approach: Personal Loans, LAP, franchise products (Home, Auto), co-lending. 75-25 secured-unsecured ratio guardrail. Expect double-digit book growth in 3-4 quarters as run-off tapers.

[Niranjan Banodkar] Enabling resolution only; no imminent trigger. Delivered ROA 1% FY26 exit; improving. Will grow at 12-13% RWA without capital consumption (DTA benefit). Levers to preserve shareholder value. Understand shareholder patience—raising capital when beneficial for growth and value creation.

[Vinay M. Tonse] Indo-Japanese corridor strengthening, especially post inter-govt meetings. Already working on MOUs with SMBC. Endeavor to route max corridor business through YES Bank. Specific confidential details not shared. Trade, investment, infra investment all areas of focus.

9x leverage max currently. Strong deposit interest from Eastern geographies. Pure FCNR (B) deposits growing well, no constraint. Leverage component depends on limits from international bank partners.

Headline 18.3% inflated by transient shorter-tenure corporate advances. Management comfortable with 15-16% average range, in line with industry or slightly ahead.

Q1 revenue only +5.9% YoY vs loan growth 15-16%. Gap due to NIM compression. Depends on margin expansion levers (RIDF rundown, cost discipline) taking effect.

Levers: RIDF rundown ₹6500-9000 Cr, Priority Sector Deposit repricing, improving CASA mix. Caveated as 'steady structural climb'—rate cuts now on par, deposit competition intense.

Core ROA improvement expected 15-20 bps FY27. Depends on sustained cost discipline and stable asset quality.

Bank emphasizes deposit franchise deepening, branch-led retail growth, SMBC-led product development rather than capex-intensive expansion.

Revenue only +5.9% YoY while loans grow 15-16%. Despite deposit cost declining, yields hit by rate cuts and rate-sensitive mix. NIM aspiration 3%+ pushed to 2-year horizon vs prior medium-term guidance.

Retail advances only 6.9% YoY despite 27.5% disbursement growth. Management explains run-off from prior slowdown (FY23-25) but book growth remains flat. Expects 3-4Q lag for disbursements to flow to accruals.

Security Receipts gains down 75% YoY (₹86 Cr vs ₹338 Cr), tax refund ₹119 Cr one-off in Q1. Management reframes as core business taking over, but reported earnings will face headwind unless core profitability accelerates faster.

PAT ₹1,072 Cr flat vs Q4 FY26 (-1% QoQ). Strong YoY comp masks absence of sequential growth. If Q2-Q4 don't accelerate, full-year guidance (1% ROA) may miss.

CET-1 14% vs higher peer levels. Board approval for ₹16,000 Cr raise is enabling only, but potential future dilution. Management emphasizes DTA benefits allow 12-13% RWA growth without capital burn, but peers higher.