On Monday, October 27, Ujjivan Small Finance Bank (SFB) touched a 52-week high on the BSE, even as benchmark indices — the Sensex and Nifty 50 — gained 0.5% and 0.6%, respectively, driven by positive global cues from the US-China trade discussions.
The rally in Ujjivan SFB share price followed the release of its Q2 FY26 results, which reflected a stable operational performance, strong secured disbursements, and a visible improvement in asset quality. The bank reported expansion in margins, supporting investor sentiment.
Ujjivan Small Finance Bank reported a net profit of ₹122 crore for the September quarter, up by 18.4% quarter-on-quarter from ₹103 crore in the June quarter. Net Interest Margin (NIM) rose to 7.9% in Q2 FY26 from 7.7% in Q1 FY26, while Net Interest Income (NII) jumped 7.7% on a QoQ basis and stood at ₹921.7 crore.
The bank’s asset quality showed improvement on a sequential basis, with gross NPAs easing to 2.45% from 2.52%.
Total deposits increased 15.1% year-on-year and 1.5% quarter-on-quarter to ₹39,211 crore, reflecting strong customer engagement and franchise expansion.
CASA deposits surged 22.1% year-on-year and 14.9% sequentially to ₹10,783 crore, pushing the CASA ratio to 27.5%. Importantly, the cost of funds (COF) improved to 7.3% from 7.6% in the previous quarter, aided by proactive repricing of Term Deposits (TDs) and Savings Accounts (SAs) across multiple buckets.
The bank’s efforts to reset deposit rates and optimize liquidity utilization helped reduce COF by 23 basis points (bps) quarter-on-quarter and 17 bps year-on-year. Additionally, the phased reduction in the Cash Reserve Ratio (CRR) supported lower funding costs, with management expecting continued improvement in the coming quarters.
Ujjivan SFB achieved its highest-ever quarterly disbursements at ₹7,932 crore, up 47.6% year-on-year and 21.3% quarter-on-quarter. The secured loan portfolio grew to ₹16,173 crore, forming 47% of total advances compared with 35% a year earlier. The gross loan book expanded 14% year-on-year and 3.9% quarter-on-quarter to ₹34,588 crore.
High-yielding secured products demonstrated robust growth, with micro mortgages rising 23% quarter-on-quarter, gold loans up 41%, and MSME loans growing 14%. The NIM expansion was further aided by strong traction in vehicle finance and housing loans, both maintained healthy yields.
Other income for the quarter stood at ₹256 crore, supported by higher disbursement activity and increased cross-selling of insurance products. The share of processing fees and insurance products in other income rose to 53%, compared to 40% in Q1 FY26, indicating improved customer engagement and fee-based income.
Interest income increased 6.7% sequentially to ₹1,682 crore, while pre-provision operating profit rose 9.6% to ₹395 crore. Profit after tax grew 18.2% sequentially, reflecting the early impact of efficiency measures and cost optimization.
Asset quality trends were encouraging, with slippages falling to ₹278 crore, marking a sharp drop, due to reduced stress in the Micro-banking book. The SMA (Special Mention Accounts) book dropped below 2%, the lowest since Q1 FY25, indicating better portfolio stability.
The micro-banking segment — a core part of the bank’s portfolio — displayed consistent repayment behavior, with collection efficiency improving from 99.46% in July 2025 to 99.50% in September 2025. Bank-level collection efficiency rose from 97.2% to 98%, reflecting broader stabilization in asset quality. Management expects a meaningful decline in credit cost in the second half of FY26, aided by improving recoveries and disciplined underwriting.
Operational metrics also remained strong, with the bank’s customer base expanding to 98.8 lakh, up 8% year-on-year and 2.1% quarter-on-quarter. The steady growth in retail customers and continued focus on secured products reinforced the bank’s strategy of balancing growth with stability.
On Monday, Ujjivan Small Finance Bank Share Price hit a 52-week High of ₹53.70 per share, surging over 3%. As of 11:57 am IST, the stock price was trading at ₹53.58 per share, up by 3%. On a year-to-date basis, the stock price has jumped over 57%.
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