Ujjivan SFB Q4 Results: Net profit beats estimates, asset quality improves QoQ

Ujjivan Small Finance Bank reported a net profit of ₹83.4 crore in Q4 FY25, closely aligned with CNBC-TV18’s poll estimate of ₹80.3 crore but sharply down 74.7% from ₹329.6 crore in the same quarter last year. Net Interest Income (NII) stood at ₹864.4 crore, marginally below the Street’s expectation of ₹865 crore and down 7.4% year-on-year from ₹933.5 crore. The decline in earnings was attributed to increased provisioning and moderation in interest income amid a changing business mix.

Asset quality improved on a sequential basis. Gross Non-Performing Assets (GNPA) dropped to 2.18% from 2.68% in the previous quarter, while Net NPA also improved to 0.49% from 0.56%. The bank maintained a healthy Provision Coverage Ratio (PCR) of 78%, backed by accelerated provisioning of ₹46 crore during the quarter. The bank’s focus on strengthening its secured loan book and tightening collections contributed to these improvements.

Total deposits grew 20% year-on-year to ₹37,630 crore, with strong CASA momentum lifting the CASA ratio to 25.5%, up 43 basis points quarter-on-quarter. The bank’s gross loan book reached ₹32,122 crore, an increase of 5% sequentially and 8% annually. A key strategic highlight was the growth in the secured loan portfolio, which rose to 44% of the total loan book as of March 2025 from 30% a year earlier. Disbursements in Q4 touched a record high of ₹7,440 crore, up 39% quarter-on-quarter, led by robust growth in micro-banking and individual loan segments.

In terms of profitability metrics for FY25, the bank reported a PAT of ₹726 crore and total income of ₹7,201 crore, up 11% from the previous year. Return on Assets (RoA) and Return on Equity (RoE) stood at 1.6% and 12.4%, respectively. The Net Interest Margin (NIM) for the year was at 8.8%, slightly down from 9.1% in FY24, reflecting changes in product mix and a gradual increase in the secured book. Despite liquidity pressures in the banking system, Ujjivan SFB managed its liquidity comfortably with a Credit-to-Deposit ratio around 85% and an average daily LCR of 120%.

Managing Director and CEO Sanjeev Nautiyal said FY25 was pivotal for the bank as it achieved strategic goals including a sharp rise in secured loans and improved asset quality, while navigating challenges in the micro banking space. He added that the bank has submitted an application to the Reserve Bank of India for a transition to a universal banking license, underscoring the institution's growth ambitions.

Shares of the Ujjivan SFB were trading down over 4% at a price of ₹42.11 on the BSE.