Gross NPA
5.4%
-150bps YoY
Improved from 6.9% a year ago, reflecting better asset quality.
ESAFSMALLFINANCEBANK
Financial Services
2026-04-??
ESAF Small Finance Bank Limited — Q4 FY26
ESAF Small Finance Bank reported Q4 FY26 PAT of ₹24 crore, a sharp sequential improvement from ₹7 crore in Q3, driven by portfolio rebalancing toward secured assets (now 61% of advances) and lower slippages.
Financial stats pending filing verification
2-Minute Summary
✦ AI-Generated from Full Transcript
ESAF Small Finance Bank reported Q4 FY26 PAT of ₹24 crore, a sharp sequential improvement from ₹7 crore in Q3, driven by portfolio rebalancing toward secured assets (now 61% of advances) and lower slippages. Gross NPA declined to 5.4% from 6.9% YoY, while NIM expanded to 7.3% from 6.6% QoQ. Disbursements grew 88% YoY to ₹12,926 crore, with 78% in secured loans. Management guided for steady-state credit cost of 2% by FY28 and ROA target of 2%, supported by a 20-25% loan growth trajectory and cost-to-income ratio of ~65%. Key risk: elevated credit costs may persist through FY27 due to legacy NPA provisioning.
Key Numbers
Net NPA
1.8%
-120bps YoY
Declined from 3.0% YoY, indicating lower stress.
Slippage Ratio (FY26)
6.47%
-400bps YoY
Reduced from 10.47% in FY25, driven by better collections.
Secured Loan Mix
61%
+8pp YoY
Increased from 53% last year, targeting 70% by March 2027.
Management Guidance
Secured asset mix target of 70% by March 2027
Management reiterated the goal to increase secured loan share to 70% by end of FY27, up from 61% currently.
Management guidance expansionSteady-state credit cost of 2% by FY28
CFO guided that normalized credit cost will be around 2% from FY28 onwards, as legacy provisioning clears.
Management guidance marginsROA target of 2% by FY28
Management expects to achieve a return on assets of 2% by FY28, with traction visible in the next two quarters.
Management guidance growthLoan growth of 20-25% on steady-state basis
The bank expects annual loan growth of 20-25%, excluding IBPC sales, supported by network leverage.
Management guidance growthKey Risks
Elevated credit costs in FY27
CFO acknowledged that backlog provisioning on NPA stock will continue through FY27, keeping credit costs above steady-state 2%.
medium · analyst_questionNIM compression from secured shift
As the bank shifts to secured lending (lower yields), NIM may trail loan growth; management guided NIM around 7% plus/minus 0.5%.
medium · analyst_questionExecution risk in digital transformation
Core banking upgrade (Bank 2.0) is expected to complete by Q3 FY27; delays could impact operational efficiency.
low · management_commentaryNotable Quotes
The growth is back and the asset quality problems are almost over and going forward we will be on a steady kind of growth.
Steady state basis a 2% credit cost is an expected kind of stuff going forward.
We are planning to have an ROA of 2% and that too we will target to achieve by FY28.
Frequently Asked Questions
What was ESAF Small Finance's revenue in Q4 FY26?
ESAF Small Finance reported revenue of — in Q4 FY26, representing a — change compared to the same quarter last year.
What guidance did ESAF Small Finance management give for FY27?
Secured asset mix target of 70% by March 2027: Management reiterated the goal to increase secured loan share to 70% by end of FY27, up from 61% currently. Steady-state credit cost of 2% by FY28: CFO guided that normalized credit cost will be around 2% from FY28 onwards, as legacy provisioning clears. ROA target of 2% by FY28: Management expects to achieve a return on assets of 2% by FY28, with traction visible in the next two quarters. Loan growth of 20-25% on steady-state basis: The bank expects annual loan growth of 20-25%, excluding IBPC sales, supported by network leverage.
What are the key risks for ESAF Small Finance in FY27?
Key risks include Elevated credit costs in FY27 — CFO acknowledged that backlog provisioning on NPA stock will continue through FY27, keeping credit costs above steady-state 2%.; NIM compression from secured shift — As the bank shifts to secured lending (lower yields), NIM may trail loan growth; management guided NIM around 7% plus/minus 0.5%.; Execution risk in digital transformation — Core banking upgrade (Bank 2.0) is expected to complete by Q3 FY27; delays could impact operational efficiency..
Did ESAF Small Finance meet its previous quarter's guidance?
Scorecard data is being built as historical quarters are processed.
Where can I read the full ESAF Small Finance Q4 FY26 concall transcript?
The full earnings conference call transcript or source release is available on the linked source material. This page provides an AI-generated summary with filing verification status shown on the financial stats.