Capital Small Finance Bank Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Capital Small Finance Bank Ltd filed with BSE on 30 Jul 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Capital Small Finance Bank reported gross advances of Rs 9,074 crore for Q1 FY27, up 22% year-on-year, with total deposits of Rs 10,596 crore, up 16% year-on-year. Net interest margin improved to 4.21%, profit after tax rose 29% year-on-year to Rs 41.3 crore, and asset quality improved with GNPA at 2.47% and NNPA at 1.14%. Management discussed segment-level growth across MSME, mortgage and agriculture, deposit repricing benefits, and its FY29 vision targets during the call.
Numbers mentioned
Gross advances: INR 9,074 crores (Q1 FY27)
p. 4
“Gross advances increased to INR 9,074 crores, registering 22% year-on-year growth, led by traction across MSME and other business loans.”
Sarvjit Samra, page 4 of the filed PDF · View the filing
Total deposits: INR 10,596 crores (Q1 FY27)
p. 4
“Total deposits for the quarter stood at INR 10,596 crores, growing 16% year-on-year with CASA improving to 36.7% earlier from 34.7% in March 2026.”
Sarvjit Samra, page 4 of the filed PDF · View the filing
Disbursements: INR 1,009 crores (Q1 FY27)
p. 4
“Disbursements remained healthy at INR 1,009 crores during the quarter.”
Sarvjit Samra, page 4 of the filed PDF · View the filing
GNPA: 2.47% (Q1 FY27)
p. 4
“Asset quality remained stable with GNPA at 2.47% and NNPA at 1.14%.”
Sarvjit Samra, page 4 of the filed PDF · View the filing
Net interest margin: 4.21% (Q1 FY27)
p. 4
“Net interest margin stood at 4.21%, while profit after tax for the quarter at INR 41 crores.”
Sarvjit Samra, page 4 of the filed PDF · View the filing
Profit after tax: INR41.3 crores (Q1 FY27)
p. 6
“Profit after tax increased by 29% yearon-year to INR41.3 crores against INR32 crores in Q1 FY26 with return on assets stood at 1.3% against 1.18% in Q1 FY26.”
Munish Jain, page 6 of the filed PDF · View the filing
Cost-to-income ratio: 59.5% (Q1 FY27)
p. 6
“Operating efficiency remained broadly stable with cost-to-income ratio at 59.5% compared to 60.6% last year the same quarter.”
Munish Jain, page 6 of the filed PDF · View the filing
Cost of deposits: 5.6% (Q1 FY27)
p. 6
“The cost of deposits for the quarter stood at 5.6% against 5.8% a quarter back.”
Munish Jain, page 6 of the filed PDF · View the filing
Capital adequacy ratio: 21.6% (Q1 FY27)
p. 6
“The capital adequacy ratio stood at 21.6%, providing sufficient headroom to support the future growth.”
Munish Jain, page 6 of the filed PDF · View the filing
Book value per share: INR327 (Q1 FY27)
p. 6
“The book value continued to show improving trajectory and stood at INR327 per share with EPS on an annualized basis of INR36.4.”
Munish Jain, page 6 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Loan book — INR16,000 crores plus · FY29
stated firmly by Munish Jain
p. 6
“making us well positioned to achieve the target FY29 loan book of INR16,000 crores plus and 22% growth in FY27.”
Munish Jain, page 6 of the filed PDF · View the filing
Advances growth — 22% · FY27
stated firmly by Munish Jain
p. 18
“We have given a guidance of 22% current year growth, and we are confident of maintaining that, and we have given a guidance of INR16,000 crores by FY29.”
Munish Jain, page 18 of the filed PDF · View the filing
Net interest margin — around 4.2% · FY27
stated conditionally by Munish Jain
p. 6
“We expect NIM to stabilize at the current levels for the FY27 and start further expanding, supported by improving CD ratio in the coming years.”
Munish Jain, page 6 of the filed PDF · View the filing
Return on assets — 1.4% · FY27
stated as an aspiration by Munish Jain
p. 6
“We expect further ROTA expansion and targeting to make it towards 1.4% in FY27 and 1.6% plus by FY29 and ROE expansion to 15% plus by FY29.”
Munish Jain, page 6 of the filed PDF · View the filing
Return on assets — 1.6% plus · FY29
stated as an aspiration by Munish Jain
p. 8
“I will say the range of 1.35% to 1.4% is the range of ROA and we look forward of further expansion of the ROA by FY29, where we want to take it towards 1.6% plus levels.”
Munish Jain, page 8 of the filed PDF · View the filing
Net NPA — below 1% · medium-term
stated as an aspiration by Munish Jain
p. 7
“The PCR is directing towards our medium-term vision, where we have mentioned in our 2029 Vision to make the net NPA towards below 1% level.”
Munish Jain, page 7 of the filed PDF · View the filing
Average CD ratio — mid- to high 80s
stated as an aspiration by Munish Jain
p. 11
“We intend to take our average CD ratio in mid- to high 80s.”
Munish Jain, page 11 of the filed PDF · View the filing
Interest spread — around 5.05% or 5.1% to 5.3% · next 1 year
stated as an aspiration by Munish Jain
p. 11
“which we target as a difference between cost of deposit and yield on advances, which we're targeting to keep it around 5.05% or 5.1% to 5.3%, for the coming next 1 year or so”
Munish Jain, page 11 of the filed PDF · View the filing
Operating expenses — FY27
stated as an aspiration by Munish Jain
p. 18
“I see there will be, if I talk about, I will slice this question into 2 time series. If I talk about FY27, we will see some improvement in the opex level.”
Munish Jain, page 18 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said MSME growth is well split between Punjab and Haryana at similar levels, with average ticket size of Rs 28 lakh.
Answered by Munish Jain
Asked by Pritesh Bumb: What is the MSME growth split between Haryana and Punjab?
p. 7
“The growth of this particular portfolio on a quarter-on-quarter is 11% and year-on-year is 49%.”
Munish Jain, page 7 of the filed PDF · View the filing
Management said the bank used profits to raise PCR to move net NPA toward its medium-term target of below 1%.
Answered by Munish Jain
Asked by Pritesh Bumb: Why has provision coverage ratio been increasing?
p. 7
“We have taken the opportunity to increase the PCR so that we can move towards the net NPA in that direction.”
Munish Jain, page 7 of the filed PDF · View the filing
Management said most repricing benefit has already occurred, with a smaller portion still due in Q2 FY27.
Answered by Munish Jain
Asked by Pritesh Bumb: How much cost of deposit repricing headroom remains?
p. 8
“We see the repricing benefit are primarily taken care. But still, there is some repricing benefit still left, which is due in Q2 FY27.”
Munish Jain, page 8 of the filed PDF · View the filing
Management explained that repricing benefits and higher-cost incremental deposits will offset each other, keeping NIM stable, with expansion expected from CD ratio growth later.
Answered by Munish Jain
Asked by Aditya Mundra: How will NIM stay stable at 4.2% given deposit cost pressure?
p. 9
“There is some benefit which we are expecting from the existing deposit, which is getting repriced versus the incremental deposits at the incremental price, which will be counter adjusting each other.”
Munish Jain, page 9 of the filed PDF · View the filing
Management said business loan, agriculture and mortgage will continue to form 75-82% of the book, with growing traction in LAP and business loans.
Answered by Munish Jain
Asked by Sagar Shah: What loan mix is being targeted for FY28-29 NIM expansion?
p. 10
“The 3 segments of our target portfolio are the business loan, agriculture and the mortgage. These 3 things put together, typically constituting anything between 75% to 82%.”
Munish Jain, page 10 of the filed PDF · View the filing
Management attributed the higher agri yield to industry-wide risk pricing and described the bank's collateralization and crop-diversification risk mitigants.
Answered by Munish Jain
Asked by Nilanjan Karfa: Why does agri lending carry a higher yield than other segments?
p. 14
“So that is what we do on this regard. So, the pricing is basis the various inbound risk attached with this particular portfolio.”
Munish Jain, page 14 of the filed PDF · View the filing
Management said absolute gross NPA in the MSME book has declined over three years, showing the improvement isn't just a base effect.
Answered by Munish Jain
Asked by Divyansh Gupta: How does MSME asset quality trend excluding the denominator effect of high AUM growth?
p. 16
“So, our gross NPA on this particular portfolio in MSME was INR65.41 crores on 31st of March 2023. And if I talk about the gross NPA in MSME portfolio as on June 30, 2026, it is INR54.54 crores.”
Munish Jain, page 16 of the filed PDF · View the filing
Management said about 48.67% of the portfolio is on annual reset, largely MCLR-driven, supporting NIM stability.
Answered by Munish Jain
Asked by Divyansh Gupta: What share of loans reprices annually given MCLR changes?
p. 16
“Now if I talk about the annual reset portfolio, our annual reset portfolio is around 48.67% of our present portfolio.”
Munish Jain, page 16 of the filed PDF · View the filing
Management explained the seasonal pattern is linked to agri crop money flowing into deposits in Q1 and Q3, with advances outpacing deposits in Q2 and Q4.
Answered by Munish Jain
Asked by Siddhart Chandrashekhar: Why is deposit growth flat in Q2 and Q4 versus other banks, and will this change?
p. 20
“So, in these 2 states, the procurement or the crop harvesting or the crop money is flowing in Q1 and Q3.”
Munish Jain, page 20 of the filed PDF · View the filing
Management said it aspires to become a universal commercial bank once it meets all RBI criteria, particularly on net NPA, with timing to be decided by the Board.
Answered by Munish Jain
Asked by Siddhart Chandrashekhar: Is the bank planning to apply for a universal bank license?
p. 21
“Sir, we have an aspiration for the universal commercial bank, but it all will be done at the most appropriate time.”
Munish Jain, page 21 of the filed PDF · View the filing
Risks flagged
Global uncertainties and geopolitical developments affecting commodity pricing and inflation
p. 3
“While global uncertainties and the geopolitical developments continue to influence commodity pricing, inflation expectations and financial markets, the Indian economy continues to demonstrate remarkable resilience and remains one of the fastest-growing major economies globally.”
Sarvjit Samra, page 3 of the filed PDF · View the filing
Agriculture lending carries climatical and price fluctuation risks
p. 14
“So, the pricing is basis the various inbound risk attached with this particular portfolio. So, this particular portfolio is being perceived as the risk because of climatical reasons or that type of reasons.”
Munish Jain, page 14 of the filed PDF · View the filing
Seasonal lag in SMA-1 and SMA-2 due to farming income transmission delays
p. 19
“So that's why in June and December, you will see some SMA position is getting some slightly deteriorated.”
Munish Jain, page 19 of the filed PDF · View the filing
Slight increase in SMA-2 accounts during the quarter
p. 19
“But yes, there is a slight increase in SMA-2, that is from 2.71% to 3.11%.”
Munish Jain, page 19 of the filed PDF · View the filing
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