Ujjivan SFB lifts ROA target, cuts credit cost view for FY27
Management now sees return on assets at 1.8-2% for FY27, credit cost at 0.9-1% of assets, and opex at 6.4%. Secured loans cross 50% of the book, deposits grow 25%.
— 1 earlier story on Ujjivan Small Finance Bank Ltd. →What's new
- ROA guidance raised to 1.8-2% from prior levels, signalling stronger profitability expectations.
- Credit cost outlook trimmed to 0.9-1% of average assets.
- Operating expenses guided at ~6.4% of assets.
Why this matters
The upward ROA revision reflects management's confidence in the secured-loan pivot and falling credit costs. If achieved, the bank could deliver record profitability.
What we're watching
- Whether the bank sustains 25% deposit growth to fund the secured loan expansion.
- Asset quality trends in the growing secured book, especially if economic growth slows.
- If the opex ratio stays below 6.4% for the rest of the year.
The full read
Ujjivan Small Finance Bank's Q1 FY27 earnings call transcript turned a routine result into a guidance upgrade story. Net profit of ₹317 crore was already known from the same-day results release. What the transcript added was a full-year ROA target of 1.8-2%, up from previous guidance, alongside a credit cost cut to 0.9-1% of assets and opex pegged at 6.4%. The secured loan book crossing 50% gives management more leeway to control credit costs. The combination of higher ROA, lower provisions, and cost control points to a profitability inflection.
Questions answered
- What drove the upward revision in ROA guidance?
- Management cited the mix shift toward secured loans (now over 50% of the book), lower credit costs (0.9-1% of assets), and tight opex control at ~6.4% of assets.
- How does Q1 net profit of ₹317 crore compare to the previous quarter?
- Q1 profit of ₹317 cr is up from ₹282 cr in the March 2026 quarter, a sequential improvement of about 12.4%.
- What does the 25% deposit growth signal?
- It indicates customer confidence and funding stability, which is critical for a small finance bank expanding its asset book.
- What is the bank's current P/E and ROE based on the latest data?
- Based on available data, Ujjivan trades at a trailing P/E of 15.8 and ROE of 14.3%.
Ujjivan Small Finance Bank Ltd.
Latest quarter · Mar 2026
Returns & growth
Story so far
All notes on UJJIVANSFB →- 28 Jul 2026 · 11:37 AM IST Ujjivan SFB lifts ROA target, cuts credit cost view for FY27
- 26d ago Ujjivan SFB's loan book grows 28.9% in Q1, asset quality improves