Utkarsh Small Finance Bank LimitedQ1 FY27 Results & Financial Update
Utkarsh Small Finance Bank Limited: Q1 FY27 standalone results and company financials – total income ₹1,002.37 Cr, PAT ₹-33.92 Cr. Explore reported YoY/QoQ movements, margins, business drivers and management commentary. This page does not provide a rating, target price or investment recommendation.
Quarter at a glanceReported figures and period changes.Changes compare like-for-like reported periods where available.
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Quarterly Results AnalysisExplore Utkarsh Small Finance Bank Q1 FY27 quarterly results and earnings: revenue, profit (PAT), EBITDA, margins, YoY and QoQ growth, order book or business updates where reported, financial performance and management commentary. Reported figures and Nivata calculations are shown separately; no buy, sell or hold recommendation is provided.
Quarter overview
Quarterly earnings analysis
Utkarsh Small Finance Bank narrowed its net loss significantly to ₹33.92 crore in Q1 FY27 compared to a net loss of ₹239.48 crore in Q1 FY25 and ₹188.02 crore in Q4 FY26, reflecting ongoing operational and credit recovery.
Total income for the quarter stood at ₹1,002.37 crore, comparing moderately against ₹1,018.65 crore in the corresponding period of the previous year and ₹952.07 crore in the preceding quarter.
The bank continued its strategic pivot towards structural de-risking of unsecured exposure, growing its secured asset portfolio to 51% of the gross loan book compared to 45% a year ago.
Asset quality showed sharp sequential and yearly improvements, with Gross Non-Performing Assets (GNPA) dropping to 6.09% (or 5.9% as per management reporting) from 11.42% in Q1 FY25, helped by strong collections and write-offs/transfers.
The Credit Guarantee Fund for Micro Units (CGFMU) scheme provided a ₹76.62 crore (approx. ₹75 crore) relief mitigation in provisions, directly contributing to lower credit costs of 2.3% for the quarter.
Liability franchise initiatives improved the CASA and retail term deposit ratio to 83%, helping reduce the cost of funds by approximately 40 basis points year-on-year to 7.7% and expanding Net Interest Margin (NIM) by about 20 basis points to 6.1%.
01 · Business model
What does Utkarsh Small Finance Bank do?
Utkarsh Small Finance Bank Limited is a scheduled commercial bank incorporated in April 2016 and headquartered in Varanasi, Uttar Pradesh, providing banking and financial services to underserved and unserved sections.
The bank's revenue generation relies heavily on interest earned from retail and wholesale advances, investments, and treasury operations, supported by fee-based and other non-interest income streams.
Its product offerings encompass savings, current, and term deposits alongside digital banking services, Joint Liability Group (JLG) loans, Micro-Banking Business Loans (MBBL), MSME loans, housing loans, commercial vehicle loans, and construction equipment loans.
The bank operates a widespread distribution network across 27 states and Union Territories, underpinned by 1,110 branches focusing primarily on rural and semi-urban locations.
02 · Historical context
What shaped the business before this quarter
The bank commenced its banking operations on January 23, 2017, following a small finance banking license granted by the Reserve Bank of India on November 25, 2016.
The Board of Directors approved a scheme of amalgamation of promoter company Utkarsh CoreInvest Limited into the bank on September 20, 2024, which has progressed through NCLT hearings and creditor approval milestones.
03 · Financial snapshot
Current quarter vs the two useful baselines
| Metric | Q1 FY27 | Year-ago | Previous quarter |
|---|---|---|---|
| Total income | ₹1,002.37 Cr | ₹1,018.65 Cr | ₹952.07 Cr |
| Profit before tax | ₹-45.41 Cr | ₹-318.87 Cr | ₹-232.08 Cr |
| Profit after tax | ₹-33.92 Cr | ₹-239.48 Cr | ₹-188.02 Cr |
| EPS | ₹-0.19 | ₹-2.17 | ₹-1.06 |
04 · Earnings & margin drivers
What drove earnings and margins
What drove net interest income and earnings
Total interest earned reached ₹883.56 crore in Q1 FY27, which includes ₹752.98 crore from interest and discount on advances/bills, ₹115.52 crore from investment income, and ₹15.06 crore from RBI and interbank fund balances.
Other income contributed ₹118.81 crore during the quarter, comprising processing fees, investment profits/losses, recoveries from written-off loans, and priority sector lending certificate (PSLC) sales.
NIM, spread, funding cost and credit cost
Supported by deposit repricing initiatives, the cost of funds improved by approximately 40 basis points year-on-year to 7.7%, resulting in a Net Interest Margin (NIM) expansion of around 20 basis points to 6.1%.
The bank reassessed its provision estimates for non-performing advances covered under the Credit Guarantee Fund for Micro Units (CGFMU), lowering provisions by ₹76.62 crore and easing credit costs to 2.3%.
Interest expended stood at ₹461.49 crore, while operating expenses were ₹477.32 crore, comprising ₹240.63 crore in employee costs and ₹236.69 crore in other operating expenses.
05 · Loan growth, sanctions & disbursements
How the lending book is moving
Total disbursements grew by 48.5% year-on-year in Q1 FY27, driven by a 4.5% year-on-year growth in JLG disbursements and a 92.9% surge in non-JLG disbursements.
The Gross Loan Portfolio expanded by 2.0% year-on-year and 1.4% quarter-on-quarter to ₹19,610 crore as of June 30, 2026.
06 · Portfolio mix & lending exposure
Where the loan book is concentrated
Segments and products
Retail banking recorded a segment revenue of ₹773.93 crore with a pre-tax loss of ₹26.76 crore; Wholesale banking generated ₹92.74 crore with a pre-tax profit of ₹15.77 crore; Treasury recorded ₹135.70 crore in revenue with a pre-tax loss of ₹34.43 crore.
07 · Asset quality & capital strength
How credit quality and balance-sheet capacity changed
Asset quality, stages and credit risk
Gross NPAs declined to ₹1,163.18 crore or 6.09% of gross advances as of June 30, 2026, compared to 11.42% a year ago and 7.71% in the preceding quarter.
Net NPAs dropped to ₹528.66 crore or 2.86% of net advances, while JLG X-bucket collection efficiency remained robust at 99.7%.
During the quarter, the bank transferred stressed loans involving 2,14,727 accounts with an aggregate principal outstanding of ₹72,681.81 lakh to Asset Reconstruction Companies (ARCs) for an aggregate consideration of ₹14,954.23 lakh, receiving security receipts worth ₹7,166.30 lakh.
Capital adequacy, net worth and balance-sheet capacity
The Capital Adequacy Ratio (CAR) stood at 17.44% (Tier 1 capital at 15.1%), which remains comfortably above the regulatory threshold of 15%.
08 · Strategy & portfolio evolution
How the lending mix and strategic agenda are changing
Ongoing investments under the Utkarsh 2.0 technology transformation project continue to enhance automation, digital underwriting, and 360-degree portfolio monitoring.
09 · Reported developments
What changed operationally
Net loss contracted by 86% year-on-year to ₹33.92 crore from ₹239.48 crore in Q1 FY25.
Fresh net NPA slippages reduced to approximately ₹125 crore from ₹400 crore in Q1 FY26, bringing GNPA down by ~550 bps year-on-year.
10 · Pressure points & risks
What is not going smoothly
Despite operational recovery, the bank continues to report a bottom-line net loss of ₹33.92 crore for the quarter.
11 · Items worth noticing
The line items that can distort a quick read
Provisions for non-performing advances were lower by ₹76.62 lakh (₹7,661.85 lakhs) due to the incorporation of eligible CGFMU guarantee cover.
12 · Funding & balance sheet
How funding, liquidity and capital support the loan book
Capital allocation & funding
Total deposits grew by 2.6% year-on-year and 1.8% quarter-on-quarter to ₹22,054 crore, with retail term deposits growing 14.7% to ₹13,393 crore and CASA deposits growing 15.1% to ₹4,867 crore.
The bank issued a call option notice on July 22, 2026, to redeem 1,950 Lower Tier II bonds aggregating up to ₹19,500 lakh at par on August 13, 2026.
13 · Beyond the numbers
What changed beyond the numbers
Reported update
Promoter amalgamation NCLT proceedings
The second motion petition for the amalgamation of Utkarsh CoreInvest Limited into the bank was reviewed by the NCLT on July 23, 2026, with further responses awaited from the Income Tax authority by August 6, 2026.
14 · Previous-quarter changes
What changed since the previous quarter
Total deposits expanded by 1.8% sequentially to ₹22,054 crore from ₹21,664.08 crore as of March 31, 2026.
15 · Key Q&A
The quarter, answered directly
What does Utkarsh Small Finance Bank do?
Utkarsh Small Finance Bank Limited is a scheduled commercial bank incorporated in April 2016 and headquartered in Varanasi, Uttar Pradesh, providing banking and financial services to underserved and unserved sections.
What is the clearest takeaway from Q1 FY27?
Utkarsh Small Finance Bank narrowed its net loss significantly to ₹33.92 crore in Q1 FY27 compared to a net loss of ₹239.48 crore in Q1 FY25 and ₹188.02 crore in Q4 FY26, reflecting ongoing operational and credit recovery.
What drove earnings or loan-book movement?
Total interest earned reached ₹883.56 crore in Q1 FY27, which includes ₹752.98 crore from interest and discount on advances/bills, ₹115.52 crore from investment income, and ₹15.06 crore from RBI and interbank fund balances.
What mattered most for margins, funding or credit cost?
Supported by deposit repricing initiatives, the cost of funds improved by approximately 40 basis points year-on-year to 7.7%, resulting in a Net Interest Margin (NIM) expansion of around 20 basis points to 6.1%.
What changed operationally beyond the headline numbers?
Gross NPAs declined to ₹1,163.18 crore or 6.09% of gross advances as of June 30, 2026, compared to 11.42% a year ago and 7.71% in the preceding quarter.
What are the main pressure points disclosed for the quarter?
Despite operational recovery, the bank continues to report a bottom-line net loss of ₹33.92 crore for the quarter.
16 · Scenario calculator
Earnings sensitivity: what if growth and margins change?
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17 · Next filing checkpoints
What the next disclosure can confirm or change
- 01
Amalgamation progress: Monitor subsequent NCLT hearings and regulatory approvals concerning the amalgamation of Utkarsh CoreInvest Limited into the bank.
- 02
Asset quality trajectory: Track further trends in gross and net NPA ratios, slippages, and the recovery performance of security receipts issued by ARCs.
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