Ujjivan SFB Q4FY26 Net Profit Surges 238% YoY; FY27 Guidance Issued

Ujjivan Small Finance Bank reported a strong financial performance for the quarter and year ended March 31, 2026. The bank's Board of Directors approved the audited financial results, with the Joint Statutory Auditors issuing an unmodified audit opinion. Net profit for Q4FY26 stood at ₹282 Crore, a 238% surge compared to ₹83 Crore in Q4FY25, and a 52% sequential increase from ₹186 Crore in Q3FY26. Total income for Q4FY26 rose 19% YoY to ₹2,186 Crore, while Pre-Provision Operating Profit (PPOP) grew 43% YoY to ₹515 Crore. For the full year FY26, total income grew 12% to ₹8,039 Crore, with an annual net profit of ₹693 Crore. The bank subsequently held its Q4FY26 Earnings Conference Call on May 08, 2026, hosted by Ambit Capital, where MD & CEO Mr. Sanjeev Nautiyal and the senior management team provided detailed commentary on performance and strategic direction.

Quarterly and Annual Performance

The bank delivered strong Net Interest Income (NII) growth of 26.4% YoY to ₹1,092 Crore in Q4FY26, driven by robust loan growth and stable product yield. Net Interest Margin (NIM) for the quarter improved to 8.5%, largely due to reducing cost of funds, stable yields, and optimal liquidity utilisation. Other income to Average Total Assets (ATA) for FY26 stood at 2.2%, while opex to ATA came in at 6.4% and cost-to-income ratio for FY26 at 65.6%. The following table summarises the key quarterly financial metrics (₹ Crore):

Metric: Q4FY26 Q4FY25 YoY Growth Q3FY26 QoQ Growth Interest Earned: 1,878 1,573 19% 1,752 7% Other Income: 307 270 14% 295 4% Total Income: 2,186 1,843 19% 2,047 7% Interest Expended: 786 709 11% 751 5% Total Cost: 1,671 1,483 13% 1,608 4% Pre-Provision Operating Profit: 515 360 43% 440 17% Credit Cost: 144 265 (46%) 195 (26%) Net Profit: 282 83 238% 186 52%

For FY26, net profit stood at ₹693 Crore with Return on Assets (RoA) and Return on Equity (RoE) at 1.4% and 10.9%, respectively. The exit quarter RoA and RoE were at 2.1% and 17.2%, respectively. Credit cost improved to 2.2% of the average Gross Loan Book (GLB) for FY26, down 20 basis points YoY.

Asset Quality and Capital Adequacy

Asset quality improved during the quarter, with Gross NPAs declining to 2.26% in Q4FY26 from 2.38% in Q3FY26. Net NPAs improved to 0.43% from 0.57% over the same period. The Provision Coverage Ratio (PCR) stood at 81% as at March 31, 2026. The bank's Capital Adequacy Ratio (CAR) stood at 21.14%, compared to 23.10% in the prior year. Bucket-X collection efficiency in micro banking remained strong at 99.8% in March 2026 and above 99.7% across Q4.

Ratio: March 31, 2026 December 31, 2025 March 31, 2025 Capital Adequacy Ratio (CRAR): 21.14% 21.62% 23.10% Gross NPA (%): 2.26% 2.38% 2.18% Net NPA (%): 0.43% 0.57% 0.49% Net Worth (₹ Crore): 6,816 6,519 6,083

Business Growth and Segments

The bank's Gross Loan Book grew 26.6% YoY to ₹40,655 Crore as at March 31, 2026. The secured portfolio now contributes 49.4% of the overall book, up from 43.5% YoY, and scaled to ₹20,079 Crore, up 43.5% YoY. Disbursements for Q4FY26 were the highest ever at ₹9,811 Crore, up 32% YoY and 18.3% QoQ. Affordable Housing recorded 35% YoY growth in loan book to ₹8,900 Crore, while MSME expanded 58% YoY to ₹3,230 Crore. Total deposits stood at ₹45,668 Crore, reflecting YoY growth of 21.4% and 8.2% QoQ, with the CASA ratio improving to 28.6%. Retail TD plus CASA stood at ₹31,955 Crore, contributing 70% of total deposits. Cost of funds for the quarter stood at 7% and for the year at 7.2%. The Liquidity Coverage Ratio (LCR) stood at 142% as of March 31, 2026.

Key segment performance is summarised below:

Segment: Performance Gross Loan Book: ₹40,655 Crore (26.6% YoY) Secured Portfolio: ₹20,079 Crore (43.5% YoY); 49.4% of book Affordable Housing Loan Book: ₹8,900 Crore (35% YoY) MSME Loan Book: ₹3,230 Crore (58% YoY) Gold Loan Growth (YoY): 292% Vehicle Finance Growth (YoY): 101% Agri Banking Growth (YoY): 126% Micro Banking Disbursements (Q4FY26): ₹5,245 Crore (11.9% QoQ) Total Deposits: ₹45,668 Crore (21.4% YoY) CASA Ratio: 28.6%

Newer business verticals such as Gold Loan, Vehicle Finance, and Agri Banking grew rapidly, contributing around 6% of the loan mix, up from 3% in FY25. In micro banking, the portfolio grew to ₹20,709 Crore, up 6.9%, with new customer additions for FY26 at 5.4 lakhs. MFI slippages for group loan and individual loan combined were in the range of ₹130 Crore for the quarter.

Management Commentary from Earnings Call

During the earnings call, MD & CEO Mr. Sanjeev Nautiyal highlighted that overall bank credit in the industry recorded strong growth of 16%, reaching ₹219 lakh crore, while deposits increased by 13.4% to ₹268 lakh crore as of March 31, 2026. He noted that the Reserve Bank of India kept policy rates unchanged at 5.25% while maintaining a neutral stance. CPI provisional inflation for March 2026 came in at 3.40%, and real GDP growth for FY26-27 is expected to be around 6.9% as per the RBI.

On the deposit strategy, management indicated no plans to reprice retail or bulk term deposits currently, while a savings account rate cut taken in April is expected to result in around 25 to 30 basis points reduction in savings account cost of funds. The bank targets a CASA ratio of around 29% to 30% and plans to maintain a CD ratio of around 88% to 89%. Management also noted a further benefit of around 30 basis points from cost of deposit repricing still remaining. On the micro mortgage yield, management indicated rates at 19.7%, while gold loan yields are upward of 14%.

Regarding micro banking growth strategy, management clarified that FY27 growth would be calibrated at a higher single-digit rate (around 9% to 10%), driven by the repeat loan cycle, while new-to-bank customer acquisition is expected to remain around 25% to 30% of total additions. On the secured book, management guided for approximately 40% growth, targeting a secured-to-unsecured mix of around 56-44 by March 2027. The bank also confirmed plans to launch a used car product alongside its existing 2-wheeler vertical.

FY27 Guidance and Strategic Updates

For FY27, the bank targets approximately 25% loan book growth and a Return on Assets of around 1.6%. Management expects credit cost to moderate to 1.4% to 1.5% of the average GLB. NIM guidance for FY27 is around 8.5%, in line with the exit quarter. The opex to ATA ratio is guided to be 20 to 30 basis points above FY26 levels due to investments in technology, digital infrastructure, AI, and branch expansion. The cost-to-income ratio is expected to remain broadly at the same level as FY26. The bank plans to add approximately 140 branches (around 20% of the existing 776 branches as of March 2026) during FY27.

FY27 Guidance Parameter: Target Loan Book Growth: ~25% Return on Assets (RoA): ~1.6% Net Interest Margin (NIM): ~8.5% Credit Cost (% of avg. GLB): 1.4% – 1.5% Secured Portfolio Mix: Upwards of 56% Branch Additions: 140 branches (20% of existing) Equity Capital Raise (max): ₹2,000 Crore CASA Ratio Target: ~29% – 30%

Regarding its Universal Banking License application, the RBI acknowledged the bank's ongoing efforts towards diversification and returned the application, advising the bank to reapply after demonstrating a further diversified loan portfolio. Management stated that the bank will continue to engage with the RBI and reapply at an appropriate time. The Board has also approved raising equity capital for an aggregate amount not exceeding ₹2,000 Crore, planned for the second half of the current financial year, to support medium-term growth.