Synopsis: Shares of this small cap banking stock declined 7% after Q2 results showed 33% YoY drop in net profit, NII grew by 4.5% QoQ and slipped 14% YoY, improving QoQ operating metrics, strong disbursement/advance growth, higher deposits, improving retail deposit mix and CASA.
This company is a leading Small Finance Bank (SFB) in India and serves customers in the unbanked and underbanked segments is now in the focus after net profit declined by 33% year on year.
With market capitalization of Rs. 1,485 cr, the shares of Suryoday Small Finance Bank Ltd are currently trading at Rs. 140.50 per share, down by 7% in today’s market session, making a low of Rs. 138, from its previous close of Rs. 149.30 per share.
QoQ view
Net interest income grew by 4.5% from Rs. 247 cr in Q1FY26 to Rs. 258cr in Q2FY26. NIM decreased by 26 bps from 7.2% to 6.9% . EBIDT also improved by 19% QoQ to Rs. 221 Cr from Rs. 186 Cr previous quarter, showing operating improvement. But net profit fell by 16% QoQ to Rs. 30.4 Cr compared to Rs. 35.3 Cr in June 2025, reflecting pressure on profitability despite operational growth gains. EPS declined from Rs. 3.32 to Rs. 2.86.
YoY view
For Q2FY26, Suryoday Small Finance Bank Net interest income slipped by 14% from Rs. 300 cr in Q2FY25 to Rs. 258 cr in Q2FY26. NIM decreased by 276 bps from 9.7% to 6.9%. EBIDT remained almost flat YoY at Rs. 221 Cr from Rs. 220 Cr. Net profit down 33% YoY to Rs. 30.4 Cr from Rs. 45.4 Cr last year. EPS also declined 33% YoY to Rs. 2.86 from Rs. 4.27.
Business highlights
In Q2 FY26, the company reported strong growth in core business parameters with gross advances rising to Rs. 11,124 Cr, up 18.9% YoY, while quarterly disbursements came in at Rs. 2,430 Cr, higher by 44.5% YoY
Deposits also saw healthy traction, increasing 35.5% YoY to Rs. 11,991 Cr as of September 2025. GNPA ratio increased by 297 bps from 2.9% in Q2FY25 to 5.9% in Q2FY26. NNPA ratio rose by 303 bps from 0.8% to 3.8% over the same period. Includes IBPC & Net off Q2 FY26 Write off amount of ₹ 432 Cr
In Q2FY26, retail deposits formed 86.0% of the bank’s total deposits, improving from 80.2% in Q2FY25, indicating stronger retail franchise build-up. The CASA ratio also improved to 20.7% as of Q2FY26 from 17.9% a year ago, reflecting better low-cost deposit mobilization.
About the company
Suryoday Small Finance Bank Ltd is a small finance bank focused on serving underbanked and emerging customer segments across retail, microfinance, affordable housing, MSME and inclusive financial products. The bank operates with a strong presence in semi-urban and urban regions and continues to expand through a diversified asset mix and granular deposit strategy.
The company delivers a ROCE of 7.28% and ROE of 6.16%, with the stock trading at around 0.80x its book value. Over the last 10 years, the company has reported a median sales growth of 23%.
Written by Manideep Appana
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