Capital Small Finance Bank Ltd — Q4 FY26
Capital Small Finance Bank delivered a steady Q4 FY26 with PAT of 40 cr (+17% YoY) and NIM improving to 4.06% (+5bps QoQ).
bullish
high
Financial stats pending filing verification
Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered1Evaded / deflected12Questions audited
Partial answer
High priority
Why are provisions higher than gross NPA additions?
Asked by Son Minas, Present Capital
Management explained PCR increase but did not fully reconcile the 22 cr provision with 25.3 cr additions.
explained PCR increase but did not fully reconcile the 22 cr provision with 25.3 cr additions
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Question
The additions for gross NPA for this particular year was 25.3 and the additional provisions we made in the P&L are around 22 cr. So if I am just tying the two numbers together are we providing more?
Manish (CFO)
The provisions for other than taxation are lesser. Yes, we enhanced the provision coverage this particular quarter and our PCR which was typically 50.45% a quarter back we have improved it to 51.89% presently.
Partial answer
High priority
Why is agriculture net NPA sticky and will it fall?
Asked by Son Minas, Present Capital
Management said it will remain rangebound with lower bias but did not commit to a significant decline.
no specific timeline for improvementdeclined to give a target below 2%
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Question
If I look at the agriculture loans the net NPA are kind of sticky... it was 2.75 in Q3 FY26, it's 2.76 now. So what is happening on the ground?
Manish (CFO)
The accretion in the NPA during the current period and there was also recovery during the quarter but both are paralleling and in line with the historical trends. So nothing unusual.
Evasive
High priority
What is the impact of ECL transition on credit cost?
Asked by Adita Mudra, My Temple Capital
Management gave a directional view but no specific number, citing ongoing evaluation.
no specific amount givenstill evaluating
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Question
Any guidance on any effect of transition to ECL that we have on our credit cost? What will be that amount?
Manish (CFO)
Initial understanding it will not be P&L negative. So we will be either P&L neutral or P&L positive with this ECL but still we are evaluating the new guidelines in detail.
Answered
Medium priority
Why did opex decline QoQ and what is steady-state opex ratio?
Asked by Adita Mudra, My Temple Capital
Management explained the minor decline and provided a range for opex to average assets (2.9-3%).
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Question
Even then our opex seems to have declined quite significantly quarter on quarter. So is there any particular reason for that?
Manish (CFO)
If we look into our opex cost, if I exclude the labor code it is almost 89 cr versus 86 crores. So the impact is only just 3 cr. So there is not a significant decline.
Answered
Medium priority
Why was fee income weaker this quarter?
Asked by Pritesh Pam, Tan Capital Advisers
Management provided a detailed breakdown and attributed the decline to treasury income, with other components stable.
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Question
Fee income has been relatively weaker... why has it been weaker this time around apart from the treasury income?
Manish (CFO)
Fee income if you look into for the current quarter on a value term it is 25.8 cr versus 26.1 cr a quarter back... there is some reduction we are seeing in the treasury income because of the opportunity available.
Answered
High priority
What is the outlook for NIM given LDR and rate cuts?
Asked by Pritesh Pam, Tan Capital Advisers
Management gave specific levers (repricing of 53% term deposits, CD ratio improvement) and a timeline for NIM improvement.
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Question
We've seen a little bit of improvement this quarter... how is our margin correlation going to be given that the rate cycle has passed down?
Manish (CFO)
We are expecting the NIM benefit coming from repricing of deposits and improvement in CD ratio. We can expect better NIM in Q2 and more meaningful improvement in Q2 as we move.
Answered
Medium priority
Why did yield on advances drop from 11.1% to 10.8%?
Asked by Pritesh Pam, Tan Capital Advisers
Management explained the two factors (rate cut and interest reversal) with specific basis point impacts.
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Question
We had seen a very steady yield at about 11.1 and now it has suddenly dropped to about 10.8. Anything happened?
Manish (CFO)
There was a 25 basis points rate cut coming in this particular quarter which has slightly impacted the yield on advances... another 8 to 10 basis point impact is due to agriculture accounts becoming NPA and interest reversal.
Answered
High priority
How will agriculture portfolio behave given geopolitical and monsoon risks?
Asked by Sri Paloshi, Icorus
Management provided a detailed assessment of portfolio resilience, citing customer profile, collateral, and irrigation infrastructure.
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Question
Given the geopolitical situation and weaker monsoon expectations, how do you see our agri portfolio to behave?
Manish (CFO)
We are in a 5 lakh to 25 lakh ticket segment... we are typically lender to those cultivating at least one MSP crop... with good water reserves and canal water reaching last mile, we are not that worried.
Answered
High priority
Why was NII growth weak despite 4% loan growth?
Asked by Saga Sha, Spark PWM
Management confirmed interest reversals as the cause and quantified the impact as one or two crores.
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Question
In spite of clocking very good sequential loan assets growth of around 4%, our net interest income has been hardly 2% on the upside. Were there any interest reversals?
Manish (CFO)
There was some accounts of agriculture which is marked for NPA which brings along with it interest reversals. There are slight interest reversals of one or two crores.
Answered
Medium priority
What is the status of NBFC-MFI exposure and asset quality?
Asked by Saga Sha, Spark PWM
Management provided specific recovery numbers and OTS status, indicating the pain is largely behind.
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Question
Our net NPA in NBFC-MFI inching up to 17.3%... any color on the same? Are we seeing any green shoots?
Manish (CFO)
We have not lended any fresh money to the NBFC MFI segment... we recovered around 60 to 70 lakh rupees from those accounts... we have already signed up the OTS with one of the lender.
Answered
High priority
What is the credit cost and cost-to-income guidance?
Asked by S from Safire Capital, Safire Capital
Management gave specific numerical guidance for both credit cost and cost-to-income ratio.
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Question
If you could just help me with the credit cost guidance for this year and our cost to income has improved well in this quarter 4. So will it be rangebound?
Manish (CFO)
Credit cost for FY26 was 0.26%... we intend to maintain in the range of 0.15 to 0.25 for FY27. Cost to income ratio shall remain in the range of 2.9 to 3% as a percentage of average assets.
Answered
High priority
What are the ROA and ROE targets for FY27 and FY29?
Asked by Harper, Robo Capital
Management provided specific ROA and ROE targets for both FY27 and FY29.
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Question
What kind of ROA and ROE profile are we looking for in FY27 and also going forward when our book reaches 16,000 crores in FY29?
Manish (CFO)
We are targeting ROA of 1.35 to 1.4 in FY27 and ROA of 1.6% plus in FY29. If I talk about the ROE we are targeting 15% plus ROE by FY29.