Any current/future capex/capital investment/strategic investment?

Utkarsh Small Finance Bank is undertaking a business transformation project aimed at making its technology architecture and business processes future-ready to support growth plans. The bank has secured all requisite statutory approvals for a proposed reverse merger of the holding company with the bank and is evaluating the optimal sequencing of petition filing with the NCLT application alongside an equity raise. The bank plans to raise equity capital of Rs. 750 crore in the next few months, depending on capital market conditions and investor appetite, to shore up its capital base. No spe

Future growth expectations in sales/revenue/volumes?

Non-JLG loan portfolio expected to grow over 30% in FY '26, supported by secured asset businesses like MSME, housing, and Micro LAP. MSME loan portfolio grew 46% YoY; Micro LAP with ~18% yield shows strong potential. Housing loans up 30% YoY; CE & CV loans up 17% YoY with increased focus on used vehicle loans (now 30% of disbursements). MBBL portfolio growing faster at 29% YoY, targeting JLG customers with better repayment. Overall gross loan book grew 2.3% YoY, but shrinkage in JLG portfolio moderates growth. JLG disbursements expected to improve from Q2 onwards. Medium-term asset mix shift e

Future growth expectations in earnings/operating earnings/profits/EPS?

FY '26 profitability is uncertain due to stress in the JLG portfolio; losses expected this year (Page 9, 8). Medium-term (2-3 years) outlook is positive with expected improvement in all KPIs and operating efficiency (Page 16). Non-JLG portfolio, including secured loans, expected to grow at over 30% with better yields, supporting operating profit growth (Page 10). Operating profit expected to improve over next 3 quarters, driven by higher yield portfolio growth and cost of funds reduction (Page 10). ROE target of 15%+ and balanced growth of 25-30% expected over medium term (next 3 years) as JLG

Utkarsh Small Finance Bank LtdQ2 FY26

Utkarsh Small Finance Bank Ltd Q2 FY26 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹14Market Cap: ₹2.6K Cr

Management growth scorecard

Revenue

Category 2

Margin

Category 2

Fundraise

Yes

Order

N/A

Capex

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2

→Non-JLG loan portfolio expected to grow over 30% in FY '26, supported by secured asset businesses like MSME, housing, and Micro LAP.
→MSME loan portfolio grew 46% YoY; Micro LAP with ~18% yield shows strong potential.
→Housing loans up 30% YoY; CE & CV loans up 17% YoY with increased focus on used vehicle loans (now 30% of disbursements).
→MBBL portfolio growing faster at 29% YoY, targeting JLG customers with better repayment.
→Overall gross loan book grew 2.3% YoY, but shrinkage in JLG portfolio moderates growth.
→JLG disbursements expected to improve from Q2 onwards.
→Medium-term asset mix shift expected: secured loans to rise above 50%, balancing risk and yields.
→Targeting 25-30% medium-term growth in balance sheet over next 2-3 years.
→Strategic focus on cross-selling, operational efficiency, and digital enablement to drive scalable growth without expanding branches further.

Margin guidance

Category 2

→FY '26 profitability is uncertain due to stress in the JLG portfolio; losses expected this year (Page 9, 8).
→Medium-term (2-3 years) outlook is positive with expected improvement in all KPIs and operating efficiency (Page 16).
→Non-JLG portfolio, including secured loans, expected to grow at over 30% with better yields, supporting operating profit growth (Page 10).
→Operating profit expected to improve over next 3 quarters, driven by higher yield portfolio growth and cost of funds reduction (Page 10).
→ROE target of 15%+ and balanced growth of 25-30% expected over medium term (next 3 years) as JLG stabilizes and secured loan share rises (Page 15).
→NIM expected to normalize around 8.5% in medium term with better loan mix and operational leverage (Page 16).
→Fund raise of Rs. 750 crore planned to support capital adequacy and growth initiatives (Page 10).

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Fundraise plans

Yes

- The bank plans to raise equity capital of Rs. 750 crore, with board and shareholder approvals already obtained. - Discussions with potential investors are to be intensified, targeting completion either by the current quarter-end or soon thereafter. - The timing depends on capital market conditions and investor appetite. - There is no mention of any new debt fundraising in the current disclosures. - The bank has a strong liquidity position with no short-term borrowings on the balance sheet as of June 2025. - Statutory approvals for a proposed reverse merger of the holding company with the bank have been secured, with the sequencing of NCLT petition filing to be aligned with the equity raise. Thus, the primary focus currently is on raising Rs. 750 crore equity capital in the near term.

Order book

The transcript provided does not specifically mention the current or expected order book or pending orders for Utkarsh Small Finance Bank Limited. The content primarily focuses on: - Loan portfolio details including growth and stress areas (JLG, MFI, MSME, Housing, CE & CV segments). - Impact of regulatory guardrails on collections and portfolio growth. - Capital adequacy and fund-raising plans. - Operational measures to improve collections and reduce credit costs. - Focus on secured loan products and growth in non-micro-banking segments. There is no explicit reference to order book or pending orders as it is a financial services institution, not a manufacturing or contracting company where such terms typically apply.

Capex plans

→Utkarsh Small Finance Bank is undertaking a business transformation project aimed at making its technology architecture and business processes future-ready to support growth plans.
→The bank has secured all requisite statutory approvals for a proposed reverse merger of the holding company with the bank and is evaluating the optimal sequencing of petition filing with the NCLT application alongside an equity raise.
→The bank plans to raise equity capital of Rs. 750 crore in the next few months, depending on capital market conditions and investor appetite, to shore up its capital base.
→No specific mention of other capex or strategic investments beyond these technology and structural initiatives was noted in the available content.

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