Utkarsh Small Finance Bank Limited – Investor Presentation Summary

Key Operational Highlights

  • Banking Outlets: 1,110 vs. 1,099 (Jun-25)
  • Presence: 27 States & UTs
  • Head Count: 18,136 vs. 19,871 (Jun-25)
  • Total Disbursements: ₹3,370 crore, up 48.5% YoY but down 19.9% QoQ
  • Micro-Banking Disbursements: ₹1,604 crore, up 29.3% YoY but down 25.3% QoQ
  • Non-Micro-Banking Disbursements: ₹1,766 crore, up 71.7% YoY but down 14.2% QoQ

Key drivers of operational performance: Strategic shift towards secured lending, geographic expansion beyond core UP & Bihar markets, and focus on collections infrastructure.

Segment-wise Performance

  • Gross Loan Portfolio: ₹19,610 crore, up 2.0% YoY and 1.4% QoQ
  • Micro-Banking Portfolio: ₹7,322 crore, down 19.4% YoY and 1.3% QoQ
  • Non Micro-Banking Portfolio: ₹12,288 crore, up 21.1% YoY and 3.2% QoQ
  • Secured Portfolio: ₹10,073 crore, up 17.4% YoY and 2.2% QoQ (51% of portfolio)
  • Unsecured Portfolio: ₹9,536 crore, down 10.4% YoY and up 0.7% QoQ (49% of portfolio)

Explanation of significant changes in segment performance: Decline in Micro-Banking portfolio due to market disruptions and strategic slowdown in disbursements with focus shifted towards collections. Growth in Non-Micro-Banking driven by secured products including MSME, Housing, and Gold loans.

Financial Highlights

Revenue: Not explicitly stated in standalone form

Net Interest Income: ₹422 crore, up 5% YoY and 12% QoQ

Operating Income: ₹541 crore, flat YoY but up 10% QoQ

PAT: (₹34) crore loss, improved from (₹239) crore loss in Q1 FY26 (86% improvement) and (₹188) crore loss in Q4 FY26 (82% improvement)

Margins: Portfolio Yield at 15.7% (Q1 FY27) vs 15.6% (Q1 FY26) vs 15.1% (Q4 FY26); Cost of Deposits at 7.6% (Q1 FY27) vs 8.0% (Q1 FY26) vs 7.9% (Q4 FY26)

YoY/QoQ comparison: Significant improvement in profitability with reduced loss of ₹34 crore in Q1 FY27 compared to ₹239 crore loss in Q1 FY26 and ₹188 crore loss in Q4 FY26

Drivers of financial performance: Higher net interest income, reduced total provisions of ₹109 crore vs ₹411 crore YoY (73% decrease), and improved operational efficiency despite increased operating expenses.

Key Risks: Market disruptions in MFI segment, legacy NPA book management, and raw material price hikes affecting borrower repayment capacity.

Geographical Revenue Split

Domestic vs Export/Regional Revenue: Not Specified

Regional Breakdown: Significant presence in UP & Bihar with first-mover advantage and brand recall; expanding retail lending in new geographies for diversification.

Balance Sheet Snapshot

Net worth (Capital + Reserves): ₹2,745 crore

Balance Sheet Size: ₹28,418 crore, up 2% YoY but down 2% QoQ

Borrowings: ₹1,845 crore, down 16% YoY and 35% QoQ

Book Value per Share: ₹15.4

CRAR: 17.4% (Tier 1: 15.1%, Tier 2: 2.3%)

Financial Health Insights: Improved capital adequacy, reduced borrowings, and stable net worth position.

Capex & Cash Flow Health

Capital Expenditure: Not Specified

Free Cash Flow: Not Specified

Operating Cash Flow: Not Specified

Net Debt Movement: Not Specified

Investment Rationale: Focus on technology upgrades, digital offerings, and optimal utilization of existing infrastructure without further significant investment.

Strategic & R&D Initiatives

Investments in Innovation: Technology-enabled process control, Loan Origination System integration with rules engine, advanced analytical tools for financial due diligence (Perfios), fraud detection platforms (Hunter and Sherlock).

Expected impact on growth: Enhanced risk management, improved underwriting and collection procedures, and better customer experience through digital offerings.

Strategic Rationale: Portfolio de-risking through increased secured lending share, geographic diversification beyond UP & Bihar, and building stable retail deposit franchise.

Industry Trends & Business Environment

Macro/Industry Trends: Market disruptions in MFI segment, increased focus on secured lending, regulatory emphasis on financial inclusion.

Impact on Company: Shift in portfolio mix towards secured products (51% secured vs 49% unsecured), slowdown in Micro-Banking disbursements, and increased focus on collections and asset quality.

Management Commentary & Growth Outlook

Strategic Outlook: Focus on diversifying asset portfolio, growing retail deposits, increasing fee income, and leveraging technology for last mile delivery.

FY Guidance: Not explicitly stated

Market Share Targets: Targeting top-100 deposit centres of the country for expansion

Risks and Opportunities: Legacy NPA book management, market competition, and opportunities in cross-selling to existing customer base across diverse product offerings.

ESG Updates

ESG Score: '62-Strong' assigned by ESG Risk Assessments & Insights Limited on April 24, 2026

Environmental Initiatives: Exclusion list, energy saving, plantation, solar light, water preservation, green deposit policy

Social Initiatives: Financial inclusion, education support, financial literacy, women empowerment, income generation loans

Governance: Diversified board, strong corporate governance framework with multiple committees

Digital Transformation

Technology Setup: Supporting physical infrastructure and digital requirements

Digital Initiatives: Digital onboarding, technology-enabled process control, scorecard-based evaluation, and continuous monitoring of early warning signals