Equitas SFB Q2 PAT at ₹218 Cr, YoY turnaround as provisions halve, GNPA to 2.29%
PAT +803.4% YoY · revenue +27.74% · margins expanding · beat vs street
₹2,066 Cr
+27.74% YoY
₹218.04 Cr
+803.4% YoY
9.25%
+7.9pp YoY
₹1.91
Equitas Small Finance Bank's standalone PAT came in at ₹218.04 Cr for Q2 FY27, up from just ₹24.14 Cr a year ago (+803% YoY) and up 18.8% sequentially from ₹183.61 Cr in Q1 FY27. The YoY jump is a base effect — Q2 FY26 profit was crushed by elevated microfinance-led credit costs — so the cleaner read is the sequential trend: a second straight profitable quarter with PAT still climbing. Total income was ₹2,357.51 Cr (+27.7% YoY, +5.4% QoQ) on interest earned of ₹2,066.00 Cr, and NPM expanded to 9.25% from 8.29% in Q1 and 1.31% a year ago. This beat our own pre-result expectation of ₹190-200 Cr net profit, even as gross advances (₹50,694 Cr) and deposits (₹52,483 Cr) both landed a touch under the ₹51-52K Cr / ₹53-54K Cr ranges flagged going in.
Q2 FY-2027 vs prior quarters
The swing was driven almost entirely by provisions, which fell to ₹114.99 Cr from ₹207.02 Cr a year ago and ₹160.66 Cr in Q1 — confirming management's ~1.5% FY27 credit-cost guidance is being met comfortably. Asset quality backs this up: GNPA eased to 2.29% (Q1: 2.42%, year-ago: 2.92%) and NNPA to 0.70% (Q1: 0.71%, year-ago: 0.98%). Pre-provision operating profit rose to ₹402.37 Cr (+67.3% YoY), but OPM (operating profit/interest earned) actually eased to 19.48% from 20.65% in Q1, so the pre-provision growth engine slowed a touch sequentially even as the bottom line kept improving on lower credit costs.
The stock went into the print at ₹67.86, up 2.8% over the past month of trading.
For context: this is the highest quarterly PAT in the last 6 quarters on our records; revenue is at a 6-quarter high.
FY27 advances growth 20%+ (on track: 27% in Q1). ROA 1.2% full year (Q1: 1.18%). NIM expected to moderate to 7.0-7.1% (Q1: 7.24%, still above range). Credit costs ~1.5% for FY27 (Q1: 1.37%, better than guidance).
— This quarter: beat
Advances grew 29.58% YoY to ₹50,694 Cr — ahead of management's 20%+ FY27 guidance and above even Q1's 27% pace. Capital adequacy rose to 20.92% (19.44% in Q1) after the bank raised ₹500 Cr of Tier II capital via NCDs listed September 25, 2026, which also bolsters the capital-raise argument in the Street's bull case. Net interest margin is not disclosed in this regulatory filing — management had guided to 7.0-7.1% moderating from Q1's 7.24% — so that watch item stays open pending the press release/concall. A GST matter was also resolved favourably this quarter, with the proposed tax demand cut 95.5%, trimming a contingent liability. No company press release was available alongside this filing to check management's own framing of the quarter against these numbers.
W1
NIM vs management's 7.0-7.1% FY27 guide (Q1 actual: 7.24%) — not disclosed in this filing, pending confirmation
W2
Credit-cost run-rate vs ~1.5% FY27 guidance — Q2 provisions ₹114.99 Cr; confirm sustained normalization next quarter
W3
Deposit growth vs the ₹53-54K Cr pre-result range — actual ₹52,483 Cr came in below it; watch CASA/granularity next quarter
Bank has no subsidiary/associate (note 17) so no consolidated statement is published; exceptional items nil both periods; figures converted from ₹ Lakh at 2dp, sub-₹0.02 Cr rounding drift in totalIncome check; results unaudited, subject to limited review only.
Advance momentum accelerates ahead of results
Equitas enters Q2 earnings with advances overrunning FY27 guidance, deposit growth steady, but Street watches for NIM resilience as funding costs bite.
The Setup
Equitas Small Finance Bank reports Q2 FY-27 earnings on 29 October with a business update already on record: advances at ₹50,694 Crore (up 29.58% year-on-year), deposits at ₹52,483 Crore (19.03% YoY growth), and disbursements of ₹7,461 Crore. The backdrop is a bank accelerating faster than its own 20%+ FY27 guidance and now flush with capital after a ₹1,750 Crore raise approved in September. The Street question: can Equitas defend margins while scaling — or does funding-cost pressure (already visible in Q1 NIM of 7.24%, down 12 bps QoQ) crimp the profit run-rate?
~₹51–52K Cr
Q2 already disclosed at ₹50,694 Cr; on pace for 20%+ FY27 target
~₹53–54K Cr
Q2 disclosed at ₹52,483 Cr (+19% YoY); CASA ratio under watch (fell to 25% in Q1)
~7.1–7.2%
Q1 FY27 was 7.24%; cost of funds rising (7.05% in Q1); expect continued pressure
~₹190–200 Cr
Q1 delivered ₹184 Cr; FY27 full-year target ₹757 Cr (~189 Cr/qtr) sets run-rate
On Track?
Yes, but with a caveat. Advances growth is ahead of schedule — at 29.58% YoY through Q2, the bank is running hot versus its FY27 20%+ guidance. Deposits are keeping pace at 19% YoY, a healthy sign that the bank is not relying on wholesale / costly funding to fuel the growth. However, Q1 flagged margin compression: the bank posted 7.24% NIM, down 12 bps quarter-on-quarter, with management citing higher cost of funds and surplus liquidity deployment during the quarter. If Q2 shows NIM stabilizing near that level (or better, if deposit growth momentum tightened funding), the street will cheer execution. If NIM slips below 7.1%, the market will begin pricing a lower-for-longer margin regime — a risk to the FY27 profit target of ₹757 Crore (which was set before recent RBI rate-cut expectations hardened).
Recent Filings & Capital Events
11 Sep
₹1,750 Cr capital raise approved; ₹500 Cr Lower Tier II bonds approved; auditors reappointed
AGM & Capital Raise
16 Sep
₹500 Cr Lower Tier II bond issuance (NCD) approved; board authorized capital raise
Board Meeting
25 Sep
₹500 Cr Lower Tier II bonds listed on exchanges; subordinated debt to bolster Tier-2 capital
Bond Listing
28 Sep
₹533.81 Cr GST Show Cause Notice proposed tax reduced by 95.5% to ~₹23.6 Cr after hearing; material gain to profitability
GST Settlement
30 Sep
New HQ operational at Equitas Towers, Mount Road, Chennai; infrastructure upgrade
Corporate Office
02 Oct
Q2 FY27: Advances ₹50,694 Cr (+29.58% YoY), Deposits ₹52,483 Cr (+19.03% YoY)
Business Update
The capital raise and bond issuance in September underscore management confidence in the growth runway; a ₹1,750 Cr equity lift provides dry powder for advances acceleration without pressure on Tier-1 capital ratios. The GST settlement is a tailwind — a ₹510 Cr provision reversal (if accrued) would be a material Q2 or Q3 P&L benefit. On balance, the operational and financial setup is bullish.
What to Watch on Result Day
1 · NIM trajectory
The absolute number for Q2 daily-average NIM. If it holds above 7.2%, margin-pressure fears ease and the street rerates upward. If it slips below 7.1%, the FY27 profit target becomes contingent on volume/fee growth to offset.
2 · Credit costs & asset quality
Slippages, GNPA ratio, and PCR (provision coverage ratio). The bank sold ₹110 Cr NPA in Q2; is asset quality stabilizing or deteriorating? Cost of credit risk is a hidden margin headwind.
3 · CASA & deposit granularity
Q1's CASA ratio fell to 25% from 29% YoY. If Q2 shows further decay, the bank is creeping toward higher-cost term deposits — a margin killer long-term. Watch the mix.
4 · Guidance reaffirm or reset
Management will confirm or amend the FY27 targets (20%+ advances, ₹757 Cr profit, 1.5% exit ROA). Any raise is a green flag; any cut signals headwinds ahead.
Equitas Small Finance Bank enters its Q2 FY27 results with the advance engine firing ahead of plan, deposits keeping pace, and a freshly capitalized balance sheet ready to scale. The Street is bullish (19 analysts, ₹86.53 target, 28% upside), priced for execution rather than valuation relief. The single risk: net interest margin is under pressure from higher funding costs, and the profit run-rate depends on stabilization or improvement on NIM — not a given in a falling-rate environment.
Result day, 29 October: Watch NIM first (the profit bridge), then asset-quality metrics and CASA decay (the margin runway). If the bank defends 7.2%+ NIM while growing advances 25%+, the 12-month target of ₹86.53 is credible. If margin compresses and guidance stalls, the Street will reprice lower. The setup is bullish; execution is the test.