Utkarsh Small F. Q1 FY27 Results (NSE: UTKARSHBNK)
Signal: Loss narrowed
The read
The bank reported a net loss of ₹33.9 Cr vs ₹239.5 Cr a year ago, a sharp improvement driven by a 73.5% reduction in provisions and asset quality turnaround (GNPA 6.09% vs 11.42%), though operating profit declined 30.6% due to higher cost-to-income ratio (47.6% vs 44.0%) and lower other income. The improvement is partly aided by a one-off CGFMU provision reassessment benefit of ₹76.6 Cr.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,002.37 Cr | -1.6% | +5.3% |
| EBIT | ₹63.57 Cr | -30.6% | |
| Net profit | ₹-33.92 Cr | 85.8% | |
| EPS | ₹-0.19 | 91.2% | |
| EBIT margin | 6.34% |
P&L walk
Loss narrowed sharply as provisions dropped 73.5% YoY (₹109 Cr vs ₹411 Cr) and asset quality improved (GNPA 6.09% vs 11.42%), though operating profit fell 30.6% on higher cost-to-income and lower other income.
Segments
Retail segment loss narrowed dramatically to ₹26.8 Cr (from ₹328.4 Cr a year ago) as provisions fell, Wholesale turned profitable at ₹15.8 Cr (vs loss ₹3.5 Cr), but Treasury swung to a loss of ₹34.4 Cr (vs profit ₹13.1 Cr), partly offsetting the overall improvement.
Key positives
- Gross NPA ratio halved to 6.09% from 11.42% YoY, net NPA improved to 2.86% from 5.00%
- Provisions & contingencies fell 73.5% YoY to ₹109 Cr from ₹411 Cr
- Net loss narrowed 85.8% YoY to ₹34 Cr from ₹239 Cr
- Wholesale segment turned profitable (₹15.8 Cr vs loss ₹3.5 Cr YoY)
Key concerns
- Operating profit before provisions declined 30.6% YoY as cost-to-income ratio rose 365 bps to 47.62%
- Treasury segment swung to loss of ₹34.4 Cr from profit ₹13.1 Cr YoY
- Revenue growth flat (-1.6% YoY), other income down 13.7%
- Capital adequacy ratio declined to 17.44% from 19.64% YoY
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