Utkarsh Small Finance Bank Limited — Q4 FY26

Utkarsh Small Finance Bank reported a net loss of ₹188 crore in Q4 FY26, driven by elevated provisions for legacy stress in the MFI portfolio. However, the quarter showed clear green shoots: JLG disbursements grew 58% QoQ, collection efficiency improved to 99.7%, and GNPA fell 330 bps QoQ to 7.7%. The bank is structurally derisking by reducing JLG exposure to 28% of loans (from 88% in FY20) and growing secured lending to 51% of the book. Management guided for 25-30% loan growth in FY27, with secured lending reaching 55% of portfolio, NIM above 8%, and ROE of 15% by FY28. Credit cost is expected to moderate to ~3% in FY27 and 2-2.5% in FY28. Key risk: legacy MFI stress may persist for another quarter, and the bank's ability to sustain collection efficiency while scaling disbursements remains untested.