Ujjivan Small Q2 FY27 Earnings Call — Analysis (NSE: UJJIVANSFB)
Ujjivan SFB delivered a record quarterly PAT of ₹365 Cr (ROA 2.4%, ROE 19.7%) with gross advances growing 32.1% YoY to ₹45,699 Cr and approved a ₹409 Cr preferential equity raise.
Result quality: strong — Earnings grew. Management sentiment: optimistic.
The take
Q2FY27 Net Interest Income ₹1,244 Cr ( +35% YoY ) . Guidance raised — FY27 micro banking gl+il growth guid… 12% to 14% . New story: Leadership Transition and Continuity .
Results
Net profit reached an all-time high of ₹365 Cr with NII rising 35% YoY to ₹1,244 Cr, gross advances expanding 32.1% YoY to ₹45,699 Cr, and GNPA steady at 2.1%.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Gross Loan Book | ₹45,699 Cr | +32.1% | yoy · Q2FY27 |
| Total Deposits | ₹50,643 Cr | +29.2% | yoy · Q2FY27 |
| Net Interest Income | ₹1,244 Cr | +35% | yoy · Q2FY27 |
| Net Profit (PAT) | ₹365 Cr | none · Q2FY27 · All-time high | |
| Net Interest Margin (NIM) | 8.4% | -10bps | sequential · Q2FY27 |
| Gross NPA | 2.1% | point_in_time · Q2FY27 · Sep-26 | |
| Net NPA | 0.3% | point_in_time · Q2FY27 · Sep-26 | |
| Credit Cost | 0.7% | none · Q2FY27 · % of ATA | |
| CASA Ratio | 26% | point_in_time · Q2FY27 · Sep-26 | |
| CRAR | 20.69% | +33bps | sequential · Q2FY27 |
Guidance
Management expects full-year ROA to overshoot the upper end of guidance, driven by full-year micro banking growth of 12-14%, secured book reaching 56%, and opex-to-ATA improving to 6.2%.
What management committed to
- Our guidance on microfinance growth remains intact for the financial year. It would be somewhere between 12% to 14%. — 12% to 14%, FY27
- Today [secured mix] is at 52%... we expect it to reach 56% by end of the year. And going forward every year 5% improvement. — 56%, FY27
- margin would come down to around 8.35% for the second half of the year. — 8.35%, H2FY27
- we feel it [opex to ATA ratio] may end up at 6.2%. — 6.2%, FY27
- We are planning to raise the balance [of INR2,000 crores fundraise] before the resolution expires [July 2027]. — remaining balance of INR1,591 crores, Q1FY28
Key themes
Secured mix shift and strong profitability
How the narrative shifted
- Leadership Transition and Continuity: Management provides a specific timeline (3-4 months from Sept 1) for the NRC to complete the MD successor search and submit to RBI, actively managing the succession narrative with scheduled updates and detailing interim leadership stability.
- Portfolio Diversification and Secured Shift: The strategic pivot toward secured lending continues to accelerate (52.1% of book), with management providing explicit yearly mix targets (56% by FY27 end, 5% annual improvement thereafter), framing it as both de-risking and scaling simultaneously.
- Asset Quality Stability and Macro Resilience: The previously generic 'no adverse impact' narrative has been augmented with detailed state-wise exposure data and specific borrower income assessment to actively ring-fence new macro risks, framing setbacks as manageable.
- Funding Cost and Margin Management: Introduced as a new explicit guidance item, framing the 25 bps rate hike as a manageable headwind rather than a structural problem.
- Capital Raise and Balance Sheet Strength: Presented as a positive development accretive to book value, strengthening the balance sheet narrative and growth optionality.
Operational commentary
- Secured lending share reached 52.1% of gross advances, supported by affordable housing reaching ₹10,056 Cr and micro mortgages growing 85.7% YoY to ₹2,031 Cr.
- Network expansion continued with the addition of 104 branches and 1,335 employees across H1FY27.
- Gold loan book expanded 209.8% YoY to ₹1,275 Cr with 117 branches added in H1 and a planned addition of ~117 branches in H2.
- Enhanced funding mix via ₹500 Cr securitisation pool in October, which management stated is NIM accretive and P&L neutral.
- Board approved ₹409 Cr preferential equity allotment to IFC, Bajaj Life, HDFC Life, and Aditya Birla Sun Life, yielding ₹0.8 BVPS accretion.
Analyst Q&A
Q. Expected NIM trajectory in H2FY27 and impact of repo rate increase and product mix shift
CFO indicated that the 25 bps repo hike will impact margins by ~10 bps, taking H2 NIM to around 8.35%, with planned direct assignment (DA) transactions helping offset secured mix yield moderation.
Q. Potential microfinance collection stress due to drought announcements in Karnataka and Maharashtra
Head of Micro Banking clarified that exposure is primarily allied agri in urban/metro branches; SLBC-notified eligible drought accounts represent only ₹15.1 Cr in Karnataka and ₹18 Cr in Maharashtra with no collection impact seen so far.
Q. Timeline and status for the balance of the ₹2,000 Cr board-approved fundraise
CFO noted that after the ₹409 Cr preferential issue, the shareholder resolution remains valid until July 2027 and the bank will opportunistically raise the balance before expiration.
Q. Target borrowing level on the balance sheet by end of FY27
Investor relations requested to check and revert offline with the exact quantitative borrowings target.
Research and educational content only. Not investment advice.