Synopsis: Shares of ESAF Small Finance Bank Ltd surged 8% after the bank returned to profitability with an Rs 7 crore Q3 FY26 profit, supported by steady advance growth, controlled asset quality, and a stable retail-focused deposit base.
The shares of this company, which provides micro-, retail- and corporate-banking and para-banking activities such as debit cards and third-party financial product distribution, in addition to treasury and permitted foreign exchange business, had its shares in momentum today after the company reported profit after several quarters.
With the market cap of Rs 1,541 crore, the shares of ESAF Small Finance Bank Ltd have gained about 8% and reached a high at Rs 30.14, compared to their previous day’s closing price of Rs 27.98.
About the Q3 Result highlights
The net interest income for the company stood at Rs 432 crore when compared to Rs 485 crore in Q3 FY25, falling by about 11 per cent on a YoY basis and on a QoQ basis increasing by 16 per cent from Rs 372 crore in Q2 FY26.
The company became profitable after 5 quarters with an Rs 7 crore profit in Q3 FY26; the company had incurred a loss of Rs 116 crore in Q2 FY26 and a loss of Rs 211 crore in Q3 FY25.
On the positive side of advances, growth is good and diversified. Gross advances of Rs 20,679 crore registered a growth of 13.1% YoY, led largely by M.A.R.G loans, which comprise 59% of the book. Asset quality is also under control, with GNPA at 5.6% and NNPA at 2.7%, while the unsecured portion has been reduced to 16%, thus indicating a more cautious approach to risk. The yield on advances has softened marginally, thus indicating a more cautious approach to lending and a focus on competitive pricing.
From a liability and profitability analysis, the deposit base has grown by 7.1% YoY to Rs 24,006 crore, with CASA at about 25.1%, thus remaining broadly stable over periods. The retail share of deposits stands at 93%, thus ensuring stability in the funding base, although the cost of deposits has risen to 7.5%, thus possibly putting some pressure on margins.
The data highlights strong operational scale and outreach, with a wide physical and digital footprint supporting growth. The bank operates through 788 branches, 720 ATMs, and over 1,000 customer service centres, serving nearly 1 crore customers. This extensive distribution network, along with business correspondents, positions the bank well to deepen penetration, especially in semi-urban and rural markets, while sustaining deposit and credit growth.
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