Financial Performance Highlights

  • Net profit grew 23.05% YoY to ₹331 crore
  • Operating profit maintained at ₹545 crore (flat YoY)
  • Net Interest Income increased 15.33% YoY
  • Total business grew 15.27% YoY to ₹2,66,420 crore
  • Advances grew 19.35% YoY
  • Deposits grew 12.16% YoY
  • CASA grew 10.2% YoY
  • Retail term deposits grew 14.94% YoY
  • Core fee income grew 13.89% YoY

Asset Quality Metrics

  • Gross NPA improved to 2.21%
  • Net NPA improved to 0.65%
  • Provision Coverage Ratio (PCR) at 92.33%
  • Slippage ratio at 0.18% for quarter (annualized ~0.70%)
  • Slippages amounted to ₹207 crore
  • Collection efficiency improved to 95%

Business Segment Performance

  • RAM advances reached 60.02% of total book
  • Retail advances grew 36% YoY
  • Agri advances grew 25%+ YoY
  • MSME advances grew 32% YoY
  • Portfolio distribution: Retail 25.82%, Agri 13.38%, MSME 20.82%

Credit Portfolio Quality

  • NBFC portfolio: 92% rated AA and AAA
  • Corporate borrowers: 67.83% rated BBB and above
  • Government guaranteed exposure: 14.88%
  • Total 82% portfolio covered by government guarantee or BBB and above ratings

Capital Adequacy

  • Capital Adequacy Ratio at 17.61%

Treasury Performance

  • Treasury income at ₹80 crore (compared to ₹200 crore in Q1 FY26)
  • Recovery in written-off accounts lower than previous quarter

Provisions

  • NPA provisioning increased to ₹123.50 crore (from ₹20 crore in previous quarter)
  • ₹150 crore provided proactively for Expected Credit Loss (ECL) provisions
  • Additional provisioning not due to asset quality deterioration but proactive ECL building

Net Worth Movement

  • Net worth increased by ₹555 crore to ₹12,500 crore
  • ₹331 crore from profit addition
  • ₹170 crore from AFS reserve increase
  • ₹54 crore from DTA adjustment

Strategic Initiatives & Guidance

Growth Targets:

  • Deposit growth guidance: 13-14%
  • Advances growth guidance: 16-18% (achieved 19.35%)
  • Target to increase RAM portfolio to 64-65% by FY27 end
  • Core fee income target: ₹900-1000 crore for FY27

Financial Targets:

  • NIM target: 2.60-2.65% (current 2.53%)
  • ROA target: 0.85-0.90%
  • ROE target: ~12% (current 10.85%)
  • Cost-to-income target: below 60% (current 60.21%)

Business Initiatives:

  • Undisbursed sanctions of ₹15,000 crore
  • Digital initiatives: Payment gateway, online PAN generation (first PSB), Digi Gold loans, CBDC launch shortly
  • Bharat Connect Vista and OMNI salary products for government employees
  • Co-lending focus with specialized cell
  • Gold loan portfolio: ₹4,000 crore (Agri gold: ₹419 crore, Retail gold: ₹5,600 crore)
  • Target to increase gold loan portfolio by ₹3,000 crore during FY27

Expansion Plans:

  • Plan to reach ₹4,00,000 crore business by FY29
  • Target: 2,000 branches, 1,600 ATMs, 6,000-6,500 Business Correspondents
  • Currently present in 450 districts
  • Gift City branch expected to open in November 2026
  • Organizational restructuring: 5 zonal offices (from 2), consolidated back office sanction process

Digital Transformation:

  • STP journeys for KCC, education loan, personal loan, pre-owned vehicle, commercial vehicles
  • Home loan STP up to ₹2 crore, commercial vehicle up to ₹50 lakh
  • 62% vehicle loans sourced digitally, 53% home loans sold digitally
  • 40% sanction rate under STP for home loans, 50% for vehicle loans
  • Tie-ups with 141 housing projects
  • OEM partnerships: Maruti, Mahindra, Hyundai

FCNR(B) Deposits Outlook

  • Expect to mobilize $100 million through FCNR(B) deposits, OFCB and ECB borrowings
  • Limited by absence of foreign branches (only Gift City branch opening in Q3 FY27)
  • Estimated $20-25 million from FCNR(B) specifically

Treasury Outlook

  • Uncertainty due to global turmoil and crude price movements (touched $90)
  • Yield expectations: 6.8% currently, may touch 6.90%

ECL Provisioning Strategy

  • Proactive building of ECL provisions before mandatory implementation from April 1, 2027
  • Core credit cost expected to remain low with no red flags in any sector

Participants

Management:

  • Shri Swarup Kumar Saha – Managing Director and Chief Executive Officer
  • Shri Ravi Mehra – Executive Director
  • Shri Rajeeva – Executive Director
  • Shri Arnab Goswamy – Chief Financial Officer

Analysts:

  • Ashok Ajmera
  • Sushil Choksey
  • Amit Mishra (Indus Equity Advisors)

Moderator: Ganesh Shankanawar