ESAF Small Finance Bank Limited (ESAFSFB)
₹44.28 +1.37% last close, 16 Oct
Q2 FY27 results
📅 Next results: 29 Oct 2026 (board meeting)ESAF Small Finance Bank Limited's board meets on 29 Oct 2026 to consider its Q2 FY27 results (July-September 2026).
In its latest reported quarter, Q1 FY27, ESAF Small's net interest income was ₹584 Cr (+54.5% year on year, +12.8% on the previous quarter), and net profit ₹80.1 Cr (against a loss a year earlier).
| Q1 FY27 (₹ Cr) | Value | YoY vs Q1 FY26 | QoQ |
|---|---|---|---|
| Net interest income | ₹584 | +54.5% | +12.8% |
| Operating profit | ₹349 | — | — |
| Net profit | ₹80.1 | from loss | +233.7% |
| EPS (₹) | 1.55 | from loss | +237.0% |
| Gross NPA | 5.40% | — | — |
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📢 Recent Corporate Announcements
ESAF Small Finance Bank Limited has submitted its quarterly compliance certificate under Regulation 74(5) of SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended September 30, 2026. The certificate was issued by the bank's Registrar & Share Transfer Agent, MUFG Intime India Private Limited. It confirms that securities received for dematerialisation during the quarter were processed, confirmed/rejected, and mutilated within prescribed timelines. This is a recurring administrative filing with zero impact on operational or financial metrics.
- Compliance certificate submitted under Regulation 74(5) of SEBI Regulations, 2018.
- Pertains to the quarter ended September 30, 2026.
- Certificate issued by RTA MUFG Intime India Private Limited on October 03, 2026.
- Intimated to BSE and NSE on October 12, 2026.
CareEdge ESG Ratings Limited has upgraded ESAF Small Finance Bank's ESG score from 75.4 to 77.6 following an annual surveillance review. The rating agency retained the bank's top-tier rating at 'CareEdge-ESG 1'. The assessment highlighted the bank's financial inclusion focus, workforce diversity, and governance frameworks including an ISO/IEC 27000-certified cybersecurity architecture. The upgrade carries no immediate financial or balance sheet impact.
- ESG score upgraded from 75.4 to 77.6 by CareEdge ESG Ratings Limited
- ESG rating retained at 'CareEdge-ESG 1'
- Rating agency noted zero data breaches and ISO/IEC 27000 cybersecurity certification
- Event occurred on October 01, 2026, at 04:53 PM
ESAF Small Finance Bank reported provisional Q2 business updates for the quarter ended September 30, 2026. Gross advances grew 25.05% YoY to ₹23,931 Crore (up 3.08% QoQ), which includes a technical write-off of ₹625 Crore of NPAs during the quarter. Total deposits rose 24.34% YoY to ₹28,466 Crore, though the CASA ratio declined slightly to 23.34% from 26.41% a year ago. The bank continued its de-risking shift towards secured lending, with secured advances now accounting for 65.19% of the gross loan book compared to 61.20% a year ago.
- Gross advances rose 25.05% YoY to ₹23,931 Crore (advances including IBPC up 30.54% to ₹24,981 Crore)
- Total deposits grew 24.34% YoY to ₹28,466 Crore, led by term deposit growth of 29.52%
- Technical write-off of NPAs during Q2 amounted to ₹625 Crore (growth would have been 28.32% YoY without write-off)
- Secured advances increased to 65.19% of gross advances compared to 61.20% as of September 30, 2025
- MARG (MSME, Agri, Retail & Gold Loan) portfolio surged 38% YoY to ₹13,938 Crore
ESAF Small Finance Bank's Board of Directors has approved raising up to ₹500 Crores of Tier II Capital via private placement of unsecured, redeemable Non-Convertible Debentures (NCDs). The fundraise represents approximately 28.1% of the bank's net worth of ₹1,780 Crores and 25.2% of its market capitalization of ₹1,987 Crores. The NCDs will be issued in one or more tranches up to the conclusion of the next Annual General Meeting. This capital enhancement is aimed at supporting the bank's business plan and bolstering its regulatory capital adequacy.
- Approved raising Tier II Capital up to ₹500 Crores via private placement of NCDs
- Instruments are Basel II compliant lower Tier II subordinated, unsecured, redeemable bonds
- Fundraise represents ~28.1% of net worth (₹1,780 Cr) and ~25.2% of market cap (₹1,987 Cr)
- Proposed to be listed on NSE (NTRP) or BSE (Wholesale Debt Market)
ESAF Small Finance Bank Limited has allotted 90,418 equity shares of face value Rs 10 each to eligible employees under its Employee Stock Option Scheme 2019. The options were exercised at an exercise price of Rs 10 per share with nil premium. Following this allotment, the bank's total issued equity share capital increases to Rs 516.11 crore comprising 51,61,08,544 shares. The equity dilution from this allotment is negligible at approximately 0.018%.
- Allotment of 90,418 equity shares of face value Rs 10 each under ESOP Scheme 2019
- Shares issued at an exercise price of Rs 10 per share with nil premium
- Total issued share capital increases to Rs 516,10,85,440 (51,61,08,544 shares)
- New equity shares rank pari-passu with existing equity shares without lock-in
CARE Ratings has revised the rating outlook on ESAF Small Finance Bank's Tier-II bonds (aggregating ₹800 Cr) from Negative to Stable, while reaffirming the rating at 'CARE A-'. The agency also reaffirmed the 'CARE A1' rating on its ₹500 Cr Certificate of Deposit program. The outlook revision is driven by moderating fresh slippages (₹75 Cr in Q1FY27 vs ₹468 Cr in Q1FY26) and a turnaround in quarterly profitability to ₹80 Cr in Q1FY27 after five loss-making quarters. Asset quality showed sharp recovery with GNPA declining to 5.40% and NNPA to 0.83% as of June 30, 2026.
- CARE Ratings revised the rating outlook on ₹800 Cr of Tier-II bonds to Stable from Negative, reaffirming 'CARE A-'.
- GNPA moderated to 5.40% and NNPA to 0.83% as of June 30, 2026, down from 8.54% and 3.83% as of September 30, 2025.
- Quarterly slippages declined sharply from ₹468 Cr in Q1FY26 to ₹75 Cr in Q1FY27 following ₹1,019 Cr NPA sales to ARCs in FY26.
- Unsecured/microfinance loan share dropped to 38% of gross advances as of June 30, 2026, from 69% in March 2024, while Gold loans increased to 42%.
- Capital adequacy ratio stood healthy at 23.86% (Tier-I CAR at 15.90%) as of June 30, 2026.
ESAF Small Finance Bank has approved the reconstitution of five key Board committees via circular resolution on August 21, 2026, with changes taking effect from September 01, 2026. The reconstituted committees include the Audit Committee, Nomination Remuneration & Compensation Committee, Risk Management Committee, Stakeholders Relationship Committee, and CSR & Sustainability Committee. Independent directors head key governance bodies, including Ashok Tukaram Dhamankar leading the Audit Committee and Ajay Sharma chairing the Risk Management Committee. This is a routine corporate governance restructuring with no direct financial impact.
- Board approved reconstitution of 5 core committees on August 21, 2026
- Changes take effect from September 01, 2026
- Audit Committee to be chaired by Independent Director Ashok Tukaram Dhamankar with 4 total members
- Risk Management Committee to be chaired by Independent Director Ajay Sharma with 5 total members
Brickwork Ratings has upgraded the credit rating for ESAF Small Finance Bank's Rs 20.00 Crore Basel III Tier II Bonds from 'BWR BBB+/Stable' to 'BWR A-/Stable'. The upgrade reflects sharp improvement in asset quality, with Net NPA dropping to 0.8% (Rs 184 Crore) in Q1FY27 from 3.8% in Q1FY26, and fresh slippages dropping to Rs 74.7 Crore from Rs 468.1 Crore. The bank's capital adequacy (CRAR) strengthened to 23.90% with Tier I at 15.90% as of June 30, 2026, alongside a return to profitability with Q1FY27 PAT of Rs 80 Crore. Portfolio de-risking is evident as secured advances reached 62% and legacy group microfinance loans shrank to ~10% of total advances.
- Credit rating upgraded from 'BWR BBB+/Stable' to 'BWR A-/Stable' for Rs 20.00 Crore Tier II Bonds.
- Net NPA declined sharply to 0.8% (Rs 184 Cr) in Q1FY27 from 3.8% (Rs 661 Cr) in Q1FY26, with PCR improving to 85.5%.
- Total Capital Adequacy Ratio (CRAR) improved to 23.90% (Tier I at 15.90%) as of June 30, 2026, from 22.20% as of March 31, 2026.
- Legacy group microfinance loans reduced 58% YoY to Rs 2,362 Cr (~10% of advances), while secured MARG portfolio reached 56% of gross advances.
ESAF Small Finance Bank Limited announced that shareholders at its 10th Annual General Meeting (AGM) held on August 14, 2026, approved the appointment of M/s. Rodi Dabir & Co, Chartered Accountants, as Joint Statutory Auditor. The appointment is for a tenure of three consecutive financial years, spanning from the conclusion of the 10th AGM until the 13th AGM. Rodi Dabir & Co is a Nagpur-based firm established in 1990 with over 35 years of experience, including statutory central audit roles across public sector banks.
- Shareholders approved the appointment of M/s. Rodi Dabir & Co (FRN: 108846W) at the 10th AGM on August 14, 2026
- Appointment tenure spans 3 consecutive financial years until the conclusion of the 13th AGM
- Auditor profile includes over 35 years of experience (established 1990) with banking and PSU central audit capabilities
Shareholders of ESAF Small Finance Bank approved three board appointments at the 10th AGM held on August 14, 2026. Shri Hari Velloor has been appointed as Non-Executive Director for a 3-year term effective September 1, 2026, to August 31, 2029. Additionally, Shri Ashok Tukaram Dhamankar was appointed as Non-Executive Independent Director for 3 years from September 1, 2026, while Prof. Biju Varkkey was re-appointed as Non-Executive Independent Director for 3 years effective August 17, 2026.
- Appointment of Shri Hari Velloor as Non-Executive Director for 3 consecutive years from September 1, 2026 to August 31, 2029
- Appointment of Shri Ashok Tukaram Dhamankar as Non-Executive Independent Director for 3 consecutive years from September 1, 2026 to August 31, 2029
- Re-appointment of Prof. Biju Varkkey as Non-Executive Independent Director for 3 consecutive years from August 17, 2026 to August 16, 2029
- All appointments were approved by shareholders at the 10th AGM held on August 14, 2026
ESAF Small Finance Bank conducted its 10th Annual General Meeting (AGM) on August 14, 2026, with 121 shareholders in attendance via video conferencing. Key resolutions transacted included the adoption of FY26 financial statements, appointment of M/s Rodi Dabir & Co as Joint Statutory Auditors for 3 years, and enabling approval for raising funds via private placement of debt securities. In addition, shareholders voted on director appointments and remuneration revisions for the MD & CEO and Executive Director.
- 10th AGM conducted with a total of 121 members attending via video conferencing.
- Approved/transacted 10 agenda items, including enabling resolutions for raising debt securities on a private placement basis.
- Appointed M/s Rodi Dabir & Co as Joint Statutory Auditors for a term of 3 consecutive financial years.
- Remote e-voting was conducted from August 11 to August 13, 2026, based on the cut-off date of August 7, 2026.
ESAF Small Finance Bank reported a 23% YoY growth in total business to ₹50,140 Cr for Q1 FY27. The bank is executing a structural shift toward secured lending, with the MARG portfolio (Agri, Gold, Mortgage) now accounting for 56% of total advances. Net Interest Income (NII) rose to ₹584 Cr from ₹378 Cr in the year-ago period, supported by a Net Interest Margin (NIM) of 7.9%. The 'Emerging Household' segment, targeting customers graduating from microfinance, grew 185% YoY to represent 32% of total advances.
- Total business crossed the ₹50,000 Cr milestone, reaching ₹50,140 Cr (23% YoY growth).
- Secured loan book grew 35% YoY to ₹14,465 Cr, now comprising 62% of total gross advances.
- Net Interest Income (NII) increased to ₹584 Cr in Q1 FY27 from ₹378 Cr in Q1 FY26.
- Emerging Household (EH) segment grew 185% YoY, contributing 32% of total gross advances.
- Net Interest Margin (NIM) stood at 7.9% for the quarter, despite industry-wide deposit pressures.
ESAF Small Finance Bank has released the audio recording of its earnings conference call held on August 3, 2026, for the quarter ended June 30, 2026. This disclosure is part of standard transparency requirements following the bank's recent financial performance, which includes a TTM loss of ₹166 Cr. Investors can access the recording to hear management's strategy regarding the high GNPA of 7.48% and the ongoing shift from micro-loans (now 51% of the portfolio) to secured retail segments. The bank is currently in a consolidation phase following a significant ₹521.4 Cr loss in FY25.
- Earnings conference call conducted on August 3, 2026, at 4:00 PM IST
- Bank reported a TTM loss of ₹166 Cr against a TTM revenue of ₹4,347 Cr
- Micro-loan concentration has been reduced from 75% to 51% of the total portfolio
- GNPA remains a key concern at 7.48% as of previous filings
- Network includes 787 branches and 1,106 customer service points as of March 2025
ESAF SFB reported a significant turnaround in Q1 FY27 with a Net Profit of ₹80 Cr, compared to a loss of ₹81 Cr in the same quarter last year. The bank's total business crossed the ₹50,000 Cr milestone, driven by a 27% YoY growth in gross advances to ₹23,216 Cr. Asset quality showed marked improvement, with Net NPA dropping sharply to 0.8% from 3.8% YoY, supported by a high Provision Coverage Ratio of 85.5%. The shift towards a secured portfolio continues, with secured loans now making up 62% of total advances.
- Reported a Net Profit of ₹80 Cr in Q1 FY27 vs a loss of ₹81 Cr in Q1 FY26
- Net NPA improved significantly to 0.8% from 3.8% YoY, with slippages down 84% YoY
- Secured advances grew 35% YoY to ₹14,465 Cr, now representing 62% of the total portfolio
- Net Interest Margin (NIM) expanded to 7.9% from 6.0% YoY
- Total business (Advances + Deposits) crossed ₹50,000 Cr, reaching ₹50,140 Cr
ESAF Small Finance Bank has reported a significant turnaround in Q1 FY2027, posting a Net Profit of ₹80 crore compared to losses in the previous fiscal year. The bank's strategic shift is evident as Microfinance (group loans) de-grew by 58% YoY, while the 'Emerging Household' segment surged 185% YoY to ₹7,351 crore. Asset quality showed marked improvement with Net NPA dropping to 0.8% and Provision Coverage Ratio (PCR) strengthening to 85.5%. Net Interest Margins (NIM) expanded significantly to 7.9% from 6.0% a year ago, driven by a higher yield on advances at 17.2%.
- Net Profit reached ₹80 crore in Q1 FY27, marking a recovery from the ₹166 crore loss reported in TTM FY26
- Gross Advances grew 27% YoY to ₹23,216 crore, with secured advances now comprising 62% of the total portfolio
- Net NPA improved to 0.8% from 3.6% in the previous year, supported by a high PCR of 85.5%
- Microfinance portfolio reduced by 58% YoY to ₹2,362 crore as the bank transitions customers to the Emerging Household segment
- Net Interest Margin (NIM) expanded by 190 bps YoY to 7.9% due to improved yields and lower cost of deposits (7.0%)
Financial Performance
Revenue Growth by Segment
Treasury revenue grew 34.08% to INR 535.04 Cr; Wholesale Banking grew 50.19% to INR 141.61 Cr; Retail Banking declined 3.09% to INR 3,529.99 Cr in FY25.
Geographic Revenue Split
Not disclosed in available documents, though the bank maintains a high regional concentration in Kerala and South India.
Profitability Margins
Net Loss of INR 521.4 Cr in FY25 (Net Margin of -12.04% on Total Income of INR 4,329.3 Cr) compared to a profit of INR 425.6 Cr in FY24, primarily due to a 36.1% increase in total expenditures.
EBITDA Margin
Not applicable for banking; Operating Loss before tax stood at INR 693.0 Cr in FY25 compared to a profit of INR 570.4 Cr in FY24.
Capital Expenditure
INR 91.987 Cr in FY25, representing a 33.23% increase from INR 69.041 Cr in FY24, primarily allocated for fixed assets and branch infrastructure.
Credit Rating & Borrowing
CARE A- (Negative) for Tier II bonds (downgraded from CARE A) and CARE A1 for Certificate of Deposits (downgraded from CARE A1+) as of September 2025.
Operational Drivers
Raw Materials
Retail Deposits (85.6% of total liabilities) and Borrowings (5.2% of total liabilities) serve as the primary capital inputs.
Import Sources
Not applicable for banking operations as funds are sourced domestically from retail depositors and Indian financial institutions.
Key Suppliers
ESAF Financial Holdings Private Limited (52.88% stake), Muthoot Finance Limited (3.63%), and Bajaj Allianz Life Insurance (2.03%) are key capital providers.
Capacity Expansion
Current network includes 787 branches, 693 ATMs, and 1,106 customer service points as of March 31, 2025.
Raw Material Costs
Interest expense on deposits and borrowings is the primary cost; total expenditures excluding tax reached INR 5,022.3 Cr in FY25, up 36.1% YoY.
Manufacturing Efficiency
Branch network efficiency with 787 branches and 1,106 customer service points serving rural and semi-urban segments.
Strategic Growth
Expected Growth Rate
5%
Growth Strategy
Consolidation in FY26 focusing on moderate business growth, sharp improvement in operational metrics, asset quality normalization, and expansion of secured loan books like Gold loans and LAP.
Products & Services
Micro-loans, Gold loans, Loans Against Property (LAP), Housing Finance, Business Loans, MSME Financing, and Retail Deposit accounts (CASA).
Brand Portfolio
ESAF
New Products/Services
Increased focus on Gold loans and secured retail segments, which helped reduce micro-loan concentration from 75% to 51% of the portfolio.
Market Expansion
Deepening presence in rural and semi-urban areas through a network of 787 branches and 1,106 customer service points.
Strategic Alliances
Partnerships with Asset Reconstruction Companies (ARCs) for NPA management and collection services for a portfolio of INR 861.5 Cr.
External Factors
Industry Trends
Microfinance sector showing early signs of stabilization and a gradual convergence of Small Finance Banks toward universal banking standards.
Competitive Landscape
Intense competition from other Small Finance Banks and NBFC-MFIs in the micro-banking and gold loan segments.
Competitive Moat
Durable advantage through the 30-year ESAF brand legacy and a specialized rural distribution network that is difficult for universal banks to replicate quickly.
Macro Economic Sensitivity
Sensitivity to monsoon cycles and rural inflation, which impact the repayment capacity of the bank's primary micro-loan customer base.
Consumer Behavior
Shift toward digital banking platforms and demand for diversified financial products beyond simple micro-credit.
Regulatory & Governance
Industry Regulations
Compliance with RBI's Small Finance Bank operating guidelines and evolving credit risk provisioning frameworks.
Environmental Compliance
Adoption of a triple bottom line approach (People, Planet, Prosperity) with a focus on social business and responsible banking.
Taxation Policy Impact
Effective tax credit of INR 171.6 Cr in FY25 due to a pre-tax loss of INR 693.0 Cr.
Legal Contingencies
Pending claims against the bank not acknowledged as debt of INR 0.458 Cr and contingent liabilities of INR 198.59 Cr.
Risk Analysis
Key Uncertainties
Continued asset quality pressure (GNPA 7.48%) and the ability to raise substantial equity capital to maintain capital adequacy buffers.
Geographic Concentration Risk
Significant regional concentration in Kerala and the broader South Indian market.
Third Party Dependencies
Reliance on ARCs for the collection of transferred NPA assets and third-party product distribution for other banking operations.
Technology Obsolescence Risk
Risk of falling behind in digital banking innovation, mitigated by ongoing investments in technology-driven customer solutions.
Credit & Counterparty Risk
High credit risk associated with unsecured micro-loans provided to marginal customers lacking formal credit history.
