Equitas Small Finance Bank Ltd (BSE: 543243 / NSE: EQUITASBNK) reported higher profitability and credit growth in the quarter ended December 2025, supported by rising advances, improved asset quality and stable deposit mobilisation, according to its Q3 FY26 disclosures. The bank reported profit after tax (PAT) of ₹90 crore in Q3 FY26, up 36% year-on-year and 273% sequentially. Gross advances grew 16% year-on-year to ₹43,268 crore, while deposits increased 7% to ₹43,668 crore.
Business overview
Equitas Small Finance Bank provides retail and MSME-focused banking services with a diversified loan portfolio spanning small business loans, vehicle finance, housing finance, microfinance and MSME lending. As of December 2025, small business loans accounted for 41% of gross advances, vehicle finance 23%, housing finance 12% and microfinance 12%.
Financial performance
Net interest income rose 4% year-on-year to ₹852 crore in Q3 FY26, while other income increased 23% to ₹285 crore. Net income grew 8% to ₹1,137 crore, while operating expenses rose 16% to ₹829 crore.
PAT increased to ₹90 crore from ₹66 crore in Q3 FY25, despite a one-time incremental provision of ₹29.52 crore linked to the implementation of a new labour code. Net interest margin stood at 6.72%, improving by around 43 basis points sequentially, while cost-to-income ratio declined to 72.96% from 75.89% in Q2 FY26.
Operating metrics
Gross advances rose 16% year-on-year and 11% sequentially, supported by robust disbursements across secured and unsecured segments. Disbursements reached a record ₹6,557 crore in Q3 FY26, up 28% year-on-year.
Deposits grew 7% year-on-year, with CASA ratio stable at 30%. Cost of funds declined to 7.13% from 7.35% in the previous quarter.
Asset quality improved, with gross non-performing assets (GNPA) declining to 2.62% from 2.82% in Q2 FY26 and net NPA falling to 0.88%. Credit cost declined to 1.88%.
Capital and liquidity
The bank reported a capital adequacy ratio (CRAR) of 20.47%, with Tier I capital at 16.63%. Liquidity coverage ratio stood at 148.84% as of December 2025.
Key developments
Equitas highlighted strong growth in secured portfolios, including housing finance, MSME lending and gold loans, alongside stabilisation in microfinance collections. The bank also reported record non-microfinance disbursements and improved collection efficiency during the quarter.
Risks and constraints
The bank’s disclosures indicate that profitability remains sensitive to credit costs, asset quality trends, funding costs, portfolio mix shifts and macroeconomic conditions affecting borrower segments.
Outlook and commentary
Management stated that improvements in asset quality, declining cost of funds and growth in secured lending supported operating performance in Q3 FY26.