Synopsis: The share of this company gained attention after MOSL reiterated its Buy rating, citing 20 percent+ growth guidance, improving asset quality, and a stronger focus on secured lending segments.
The share of this company, which primarily focuses on promoting financial inclusion by offering microfinance, commercial vehicle loans, and MSME financing to the unserved and underserved segments of society, gained focus after MOSL’s bullish view.
With a market capitalization of Rs 8,453 crore, Equitas Small Finance Bank Ltd’s share on Friday made a day high of Rs 76.15 per share, up by 6.65 percent from its previous day’s close price of Rs 71.40 per share. The share of the company gave a return of 6 percent over the year.
Brokerage View
MOSL maintained a Buy rating on Equitas Small Finance Bank with a target price of Rs 85 a upside of 19 percent from it previous close, supported by strong growth guidance, improving operating leverage, healthy asset quality, and a growing secured loan portfolio.
Growth Strategy Focused on 20%+ Expansion: Equitas Small Finance Bank highlighted its long-term strategy of delivering healthy growth of over 20 percent annually over the next five years. Management remains focused on building a balanced and sustainable franchise while maintaining profitability and asset quality.
Secured Loan Segments to Drive Growth: The bank expects future growth to be led by secured asset classes, particularly Small Business Loans (SBL), Vehicle Finance (VF), and Home Loans (HL). Meanwhile, the Microfinance Institution (MFI) portfolio is expected to remain capped at around 10 percent of the overall loan book.
Strengthening the Liability Franchise: On the liabilities side, Equitas plans to deepen its presence in existing markets while gradually expanding toward mass-affluent and formal customer segments. This strategy is aimed at improving deposit quality and supporting long-term funding stability.
Operating Efficiency and Technology Initiatives: Management expects operating leverage to improve over the medium term through greater in-house sourcing, streamlined operational processes, and enhanced technology capabilities. These initiatives are expected to support efficiency gains and improve overall productivity.
Healthy Asset Quality and Profitability Outlook: Asset quality trends remain stable, supported by healthy performance in the MFI segment and strong collections across secured portfolios such as SBL and VF. The bank has guided for steady-state credit costs of 1.25 percent to 1.50 percent and expects Return on Assets (RoA) of around 1.5 percent, with potential to reach 1.8 percent during favorable business conditions.
About the Company
Equitas Small Finance Bank Ltd (ESFBL) is one of India’s largest small finance banks, headquartered in Chennai. It primarily focuses on promoting financial inclusion by offering microfinance, commercial vehicle loans, and MSME financing to the unserved and underserved segments of society.
Financial Highlight: The revenue from operations grew by 12 percent to Rs 1,836 crore in Q4 FY26 from Rs 1,644 crore in Q4 FY25, and EBIDT grew by 36 percent to Rs 871 crore in Q4 FY26 from Rs 642 crore in Q4 FY25. This was accompanied by a net profit growth of 405 percent to Rs 213 crore in Q4 FY26 from Rs 42.1 crore in Q4 FY25, resulting in an EPS growth of 403 percent to Rs 1.86 per share in Q4 FY26 from Rs 0.37 per share in Q4 FY25.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
