This article first appeared on GuruFocus .
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Total Branches:814 as of June 26, with 38 new branches operationalized in FY27.
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Deposit Growth:25% year-on-year, reaching Rs. 48,129 crores.
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CASA Deposits:Rs. 12,930 crores, up 37.8% year-on-year.
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Cost of Funds:6.86% for the quarter.
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Liquidity Coverage Ratio:Approximately 132% for the quarter.
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Gross Loan Book:Rs. 42,903 crores, up 28.9% year-on-year and 5.5% quarter-on-quarter.
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Secured Loan Book:Rs. 21,638 crores, up 42.7% year-on-year and 7.8% quarter-on-quarter.
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Microbanking Book:Rs. 21,371 crores, up 16.8% year-on-year.
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Disbursements:Rs. 9,245 crores, up 41.4% year-on-year.
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Affordable Housing Loan Book:Rs. 11,210 crores, up 40.8% year-on-year.
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MSME Portfolio Growth:54% year-on-year, reaching Rs. 3,470 crores.
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Gold Loan Book:Rs. 1,020 crores, up 248.6% year-on-year.
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Vehicle Loan Book:Rs. 1,036 crores, up 85.1% year-on-year.
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GNPA:Reduced to 2.17% for the quarter.
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Provision Coverage Ratio:Strengthened to 85%.
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Profit After Tax:Rs. 317 crores.
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ROE:18.2%.
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Net Interest Income:Rs. 1,186 crores.
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Net Interest Margin:Stable at 8.5%.
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Credit Cost:Rs. 127 crores, with guidance revised to 0.9% to 1% of average total assets for FY27.
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Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Ujjivan Small Finance Bank Ltd ( BOM:542904 ) reported a strong growth in deposits, with a 25% year-on-year increase, reaching Rs. 48,129 crores.
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The bank's CASA deposits grew by 37.8% year-on-year, indicating a strong focus on enhancing the value proposition for deposit customers.
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The bank operationalized 38 new branches, increasing the total count to 814, which supports its growth strategy.
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Asset quality remained stable with a GNPA of 2.17% and a strong provision coverage ratio of 85%.
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The bank's microbanking book grew by 16.8% year-on-year, driven by sustained momentum in the sector.
Negative Points
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The bank is cautious about the potential impact of El Nino on economic activity in the second half of the year.
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There is competitive pressure in the affordable housing market, which could impact yields.
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The cost of funds, although on a downward trajectory, remains a concern in a tight liquidity scenario.
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The bank's operating expenses are expected to increase due to capacity building expenses, which could impact profitability.
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The bank is mindful of the prevailing funding rate environment and competitive intensity in CASA mobilization, which could pressure margins.
Q & A Highlights
Q: How is Ujjivan Small Finance Bank preparing to sustain yields in the face of increasing competition in affordable housing and other segments? A: The bank is focusing on semi-urban and urban markets with a robust distribution network of 580 to 590 branches. The ticket size mix of 16 to 20 lakh helps maintain desired yields. Despite competitive pressure, the bank is confident in maintaining yields due to its strategic market presence. (Unidentified_4)
Q: What has led to the sharp increase in new-to-bank customers in the gold loan segment this quarter? A: The activation of over 100 branches for gold loans and increased demand from microfinance customers have contributed to the rise in new-to-bank customers. The bank plans to expand its active branches from 430-440 to about 575 by the end of the year. (Vibhas Chandra, Head Micro Banking and Gold Loan)
Q: With the cost of funds coming down, do you expect any further rate hikes in the deposit buckets? A: The bank does not foresee an immediate need for further rate hikes and will maintain current levels while monitoring market movements. (Vibhas Chandra, Head Micro Banking and Gold Loan)
Q: What is the strategy for the vehicle finance portfolio, particularly regarding pre-owned cars and commercial vehicles? A: The bank has completed a pilot for pre-owned cars and plans to test this business in two or three geographies before scaling up next year. The exploration of commercial vehicles (HCV and LCV) will be considered after the financial year. (Unidentified_4)
Q: How does the bank plan to manage operating expenses and capacity building investments this year? A: The bank plans to spend around 250 crores on capacity building, including branch openings, branding, and IT investments. This spending has started in June and will continue throughout the year, with an expected full-year OpEx of around 6.4% of average assets. (Unidentified_9)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
