Earnings call transcript: Ujjivan Small Finance Bank posts record q2 FY2027 profit

Ujjivan Small Finance Bank announced record earnings for Q2 FY2027, with net profit after tax reaching INR 365 crore, marking the highest quarterly profit ever. Net interest income grew by 35% year on year to INR 1,244 crore. Deposits surged to an all-time high of INR 50,643 crore, up 29.2% from a year earlier, with a CASA ratio of 26%.

The bank's asset quality remained stable, with GNPA at 2.1% and NNPA at 0.3%. Net interest margin is expected to ease to around 8.35% in the second half following a 25-basis-point rise in the repo rate. Ujjivan is shifting towards secured lending, which now constitutes 52.1% of its loan portfolio. The bank expects its business to expand across deposits, loans, and fee income, with total income reaching INR 2,450 crore in the quarter.

Return on assets stood at 2.4%, and return on equity was 19.7%, both strong indicators for a small finance bank. The bank's strategy includes diversifying its product mix beyond microfinance, focusing on secured loans such as affordable housing, micro mortgages, MSME, gold loans, agri lending, and two-wheeler loans. Management expects net interest margin to ease, but overall profitability appears robust based on the current figures.