Ujjivan Small Q1 FY27 Earnings Call — Analysis (NSE: UJJIVANSFB)
Ujjivan SFB raises FY27 ROA guidance to 1.8-2% on lower opex and credit cost, driven by strong secured asset diversification and deposit growth.
The take
Q1FY27 Net Interest Income (NII) ₹1,186 Cr . New guidance — FY27 total asset / loan book growth… 25% . New story: Secured asset diversification driving growth .
Results
Q1FY27 NII ₹1,186 Cr; PAT ₹317 Cr; NIM stable at 8.5%; deposits up 25% YoY to ₹48,129 Cr; GNPA improved 10 bps to 2.17%; loan book grew 28.9% YoY to ₹42,903 Cr.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Net Interest Income (NII) | ₹1,186 Cr | yoy · Q1FY27 | |
| Profit After Tax (PAT) | ₹317 Cr | yoy · Q1FY27 | |
| Net Interest Margin (NIM) | 8.5% | +stable | yoy · Q1FY27 |
| Total Deposits | ₹48,129 Cr | +25% | yoy · Q1FY27 |
| CASA Deposits | ₹12,930 Cr | +37.8% | yoy · Q1FY27 |
| Gross Loan Book | ₹42,903 Cr | +28.9% | yoy · Q1FY27 |
| Secured Loan Book | ₹21,638 Cr | +42.7% | yoy · Q1FY27 |
| Disbursements | ₹9,245 Cr | +41.4% | yoy · Q1FY27 |
| Gross NPA (GNPA) | 2.17% | -10 bps | qoq · Q1FY27 |
| Provision Coverage Ratio (PCR) | 85% | point_in_time · Q1FY27 · Jun-26 | |
| Credit Cost | ₹127 Cr | none · Q1FY27 | |
| Cost of Funds | 6.86% | sequential · Q1FY27 | |
| Return on Assets (ROA) | 2.2% | point_in_time · Q1FY27 · quarterly annualized |
Guidance
FY27 ROA guidance raised to 1.8-2%; opex to average assets guided lower at ~6.4%; credit cost guidance revised to 0.9-1% of average total assets.
What management committed to
- Ujjivan SFB will achieve FY27 asset growth of 25%. — 25%, FY27
- FY27 full-year opex to average assets will be around 6.4%, lower than earlier planned. — 6.4%, FY27
- FY27 credit cost guidance revised to 0.9% to 1.0% of average total assets. — 0.9% to 1.0%, FY27
- FY27 ROA guidance raised to 1.8% to 2.0%. — 1.8% to 2.0%, FY27
- Secured loan book mix will reach 56% of total loan book by March 2027. — 56%, FY27
- Gold loan monthly disbursements will exit March 2027 at around ₹230-250 Cr per month. — ₹230-250 Cr, FY27
- Ujjivan SFB will add 144 branches in FY27. — 144, FY27
Key themes
Diversification-driven profitability upgrade and secured lending scale-up
How the narrative shifted
- Secured asset diversification driving growth: Management positions the shift to secured loans (affordable housing, MSME, gold, vehicle) as the primary growth and de-risking engine, targeting 56% secured mix by March 2027.
- Liability franchise strengthening and CASA focus: Deposits hit highest YoY growth in two years; CASA growth robust; new programmes like Ivory, NR, and FCNR used to deepen stickiness and reduce cost of funds pressures.
- Improving asset quality and credit cost moderation: Declining slippages, stable bucket X collections at 99.7% in MFI, and steady secured book GNPA give confidence to lower full-year credit cost guidance.
- Macro and weather-related uncertainties as a watch factor: Geopolitical tensions, El Nino, and kharif sowing delays flagged as risks but not derailing the base outlook; used to frame conservatism in near-term spending ramp-up.
- Operating cost discipline and capacity investment: Delayed commencement of capacity-building spend (branch, tech, branding) helps Q1 profits; full-year opex guide lowered to 6.4% of average assets, signaling cost efficiency.
- Gold loans as high-growth new business: Gold loan book grew 248% YoY, branch activations accelerated, and new geographies (East, North) are being tapped; management sees large headroom and strong productivity per loan officer.
Operational commentary
- Secured loan mix surpassed 50% (50.4%) of total loan book; secured book grew 42.7% YoY, driven by affordable housing (+40.8% YoY), MSME (+54% YoY), gold loans (+248.6% YoY), and vehicle loans (+85.1% YoY).
- Gold loans scaled to ₹1,020 Cr, disbursed through 455 branches (+106 in Q1); origination LTV 75%, book LTV 56%; plan to reach ~575 active branches by FY27-end with monthly disbursement exit rate of ₹230-250 Cr.
- Affordable housing and micro mortgages combined GNPA stable at 1.2% and 0.6% respectively; micro mortgage yields ~19.5%; affordable housing yield maintained at ~12.5%.
- MSME book crossed ₹3,470 Cr; working capital and supply chain finance contribute 28% of MSME book; new product purchase invoice discounting launched; PAR reduced 13 bps, new book GNPA stable at 0.5%.
- Microfinance borrower base started growing after seven quarters of degrowth, adding 1.72 lakh new customers; bucket X collection efficiency 99.68%, slippages annualized down to ~1.72% from 2.68% in Q4FY26.
- Liability franchise strengthening: CASA grew 37.8% YoY; Ivory (HNI programme) gaining momentum; co-branded credit card in testing phase; FCNR deposits tapped as new funding avenue.
- Branch network expanded to 814 with 38 new branches in Q1; plan to add 144 branches in FY27 to support distribution for asset and liability growth.
Analyst Q&A
Q. Non-MFI yield sustainability, especially in affordable housing, amid competitive pressure and whether micro mortgage will be scaled more aggressively to maintain overall mortgage yields.
Ashish Goel: Affordable housing yield maintained at ~12.5% due to semi-urban focus and ticket size mix; micro mortgage yields ~19.5% with 70% semi-urban mix; confident in maintaining yields given geography and ticket size strategy.
Q. Reasons behind sharp increase in new-to-bank customer share in gold loans to 40% in Q1.
Vibhas Chandra: Activation of 100+ new branches for gold loans and rising demand from microfinance customers drove new customer acquisition.
Q. Will cost of funds move up after rate hikes in some buckets, and what is the FY27 cost of fund trajectory?
Brajesh Cherian: Marginal increase expected, already baked into ROA guidance; no immediate further rate hike needed; securitization/IBPC options available to optimize.
Q. ROA profile of affordable housing book excluding micro mortgages.
Gaurav Sah: We are not looking to give any product level numbers; will come back when ready.
Q. Whether opex run rate in Q1 is the true underlying, with ~₹250 Cr extraordinary spend to be layered on.
Sadananda Kamath: Yes, more or less; extraordinary spend delayed due to planning and macro caution, started in June, will impact coming quarters; full-year opex/ATA seen at 6.4%.
Research and educational content only. Not investment advice.