Equitas SFB (EQUITASB) reported a net loss of INR2.24b vs our estimate of PAT of INR220m, driven by a sharp rise in provisions due to stress in MFI and changes in the provisioning policy. NII declined 2% YoY/5% QoQ to INR7.8b (in-line), amid declining yields due to shrinking MFI book and increased stress. NIM contracted 58bp QoQ to 6.55% (our est of 6.88%). Advances declined 4% QoQ (up 8.8% YoY) amid a sharp decline in the MFI portfolio (down 21.9% QoQ), which now stands at 9.4% of the portfolio. Meanwhile, deposits grew 18.3% YoY/3.0% QoQ, led by a sharp increase in CA deposits (up 92% YoY/36.7% QoQ). As a result, CASA ratio increased to 29.4%.
OutlookWe cut our earnings sharply by 86%/21% for FY26/27E and estimate FY27E RoA/ RoE at 1.1%/ 11.5%. Reiterate BUY with a TP of INR70 (1.3x FY27E ABV).
For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Equitas Small Finance Bank_11082025_Motilal OswalDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
