Capital Small Finance Bank Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript Capital Small Finance Bank Ltd filed with BSE on 05 May 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 Q4 FY'26 total deposits crossing ₹10,000 crores with 20% year-on-year growth, gross advances at ₹8,687 crores up 21% year-on-year, and profit after tax of ₹40 crores for the quarter. Net interest margin improved to 4.06% in Q4 FY'26 from 4.01% in Q3, supported by a decline in cost of deposits, while asset quality showed gross NPA at 2.54% and net NPA at 1.24%. Management discussed plans for continued branch expansion, deposit repricing benefits, and growth across MSME, mortgage and agriculture segments.
Numbers mentioned
Total deposits: ₹10,018 crores (FY26 (as of March 31, 2026))
p. 5
“Bank continued to have stable CASA and the same stood at 34.7% as on 31st March 2026.”
Munish Jain, page 5 of the filed PDF · View the filing
Gross advances: ₹8,687 crores (as of March 31, 2026)
p. 4
“As of March 31, 2026, our gross advances stood at ₹8,687 crores, reflecting sustained momentum in credit growth.”
Munish Jain, page 4 of the filed PDF · View the filing
Profit after tax: ₹40 crores (Q4 FY26)
p. 4
“Net interest margin stood at 4.1%, while profit after tax for the quarter at ₹40 crores.”
Sarvjit Samra, page 4 of the filed PDF · View the filing
Gross NPA: 2.54% (Q4 FY26)
p. 4
“Asset quality improved and remain well managed during the quarter with gross NPA stood at 2.54%, improving 14 basis points sequentially and 4 basis points year-on-year basis.”
Munish Jain, page 4 of the filed PDF · View the filing
Net NPA: 1.24% (Q4 FY26)
p. 4
“Net NPA stood at 1.24% compared to 1.35% a quarter back and 1.30% in the corresponding period last year.”
Munish Jain, page 4 of the filed PDF · View the filing
Net interest margin: 4.06% (Q4 FY26)
p. 5
“NIM showing early signs of improvement and improved to 4.06% in Q4 FY '26 versus 4.01% in Q3 FY '26 and the same is attributed to reducing cost of deposit on repricing at maturity.”
Munish Jain, page 5 of the filed PDF · View the filing
Cost of deposit: 5.75% (Q4 FY26)
p. 5
“Cost of deposit has started showing declining trend and stood at 5.75% in Q4 FY '26 against 5.86% in Q3 FY '26, that is a quarter back, backed by initial start of the deposit repricing.”
Munish Jain, page 5 of the filed PDF · View the filing
Return on assets: 1.33% (Q4 FY26)
p. 5
“Return on assets for Q4 FY '26 improved to 1.33% against 1.16% of Q3 FY '26 and 1.36% in Q4 FY '25.”
Munish Jain, page 5 of the filed PDF · View the filing
Capital adequacy ratio: 22.3% (as of March 31, 2026)
p. 5
“The capital adequacy ratio stood at 22.3% and average LCR for the quarter was a strong 211%, providing sufficient headroom to support our future growth.”
Munish Jain, page 5 of the filed PDF · View the filing
Disbursements: ₹919 crores (Q4 FY26)
p. 4
“Fresh disbursement stood at ₹919 crores during the quarter and ₹3,508 crores during the year, registering a robust growth of 20% and 23% year-on-year basis, respectively.”
Munish Jain, page 4 of the filed PDF · View the filing
Pre-provision operating profit: ₹62 crores (Q4 FY26)
p. 5
“Pre-provision operating profit, PPOP, for the Q4 FY '26, reflecting a strong 28% growth and stood at ₹62 crores and same is ₹223 crores for the FY '26, that is a growth rate of 19%.”
Munish Jain, page 5 of the filed PDF · View the filing
Branch network: 211 branches (as of March 2026)
p. 5
“As of March 2026, our branch network expanded to 211 branches across 5 states and 2 union territory, strengthening our presence in rural and semi-urban market, with 77.3% branches being SURU branches, which remain a key driver of our long-term growth.”
Munish Jain, page 5 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.
Advances growth — 22% plus · FY27
stated firmly by Munish Jain
p. 5
“As we look ahead, we plan to organically grow our secured loan book at the rate of 22% plus for FY '27 and further accelerating the growth to achieve an advanced book of over ₹16,000 crores by FY '29.”
Munish Jain, page 5 of the filed PDF · View the filing
Branch network — 235 branches · current year
stated firmly by Munish Jain
p. 5
“We aim to expand our footprint by deepening presence in contiguous states and intensifying penetration within the existing markets with a target of 235 branches by the end of the current year and making it 300 plus by FY '29.”
Munish Jain, page 5 of the filed PDF · View the filing
Return on tangible assets — 1.35% to 1.4% · FY27
stated firmly by Munish Jain
p. 6
“To achieve ROTA expansion in the coming year and with a target to make it 1.35% to 1.4% in FY '27 and 1.6% plus by FY '29 with an ROE expansion of 15% plus by FY '29.”
Munish Jain, page 6 of the filed PDF · View the filing
Cost of deposit repricing benefit — next 3 to 6 months
stated conditionally by Munish Jain
p. 6
“We expect the benefit of repricing to accrue more meaningfully over the next 3 to 6 months.”
Munish Jain, page 6 of the filed PDF · View the filing
Opex to average assets — 2.9% to 2.95% or 2.9% to 3% · FY27
stated firmly by Munish Jain
p. 8
“in the year 1, that is our current fiscal FY '27, we intend to keep it between 2.9% to 2.95% or 2.9% to 3%. That is the broad range I can give with a lower biasness.”
Munish Jain, page 8 of the filed PDF · View the filing
Credit cost — 0.15% to 0.25% · FY27
stated conditionally by Munish Jain
p. 15
“we always intend to maintain in the range of 0.15% to 0.25%, and we are quite confident to maintain in this particular range just with a negative bias for the next year.”
Munish Jain, page 15 of the filed PDF · View the filing
Credit cost — 0.3% · up to FY29
stated as an aspiration by Munish Jain
p. 15
“our stated objective is also very clear. We want to keep our credit cost downward to 0.3% up to FY '29.”
Munish Jain, page 15 of the filed PDF · View the filing
Cost-to-income ratio — 2.9% to 3% · FY27
stated conditionally by Munish Jain
p. 15
“So we believe in the coming period, coming FY '27, this number shall remain in the range of 2.9% to 3% if we calculate as a percentage to the average assets.”
Munish Jain, page 15 of the filed PDF · View the filing
Return on assets — 1.6% plus · FY29
stated as an aspiration by Munish Jain
p. 17
“We're targeting ROA of 1.35% to 1.4% in FY '27, and we are targeting ROA of 1.6% plus in FY '29.”
Munish Jain, page 17 of the filed PDF · View the filing
Return on equity — 15% plus · FY29
stated as an aspiration by Munish Jain
p. 17
“If I talk about the ROE, we are targeting 15% plus ROE by FY '29.”
Munish Jain, page 17 of the filed PDF · View the filing
Other income to assets — 0.85% to 0.95% · current year
stated conditionally by Munish Jain
p. 13
“So typically, as far as the other income is concerned, other income, which is presently 0.9% on the asset basis. So we intend to make it between 0.85% to 0.95% also current year.”
Munish Jain, page 13 of the filed PDF · View the filing
New Banca product addition — one more product · FY27
stated firmly by Munish Jain
p. 22
“We intend to add one more product in FY '27 and one more product in coming year.”
Munish Jain, page 22 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 agri NPA was largely static due to it being a non-recovery period, with recoveries expected in Q1 and Q3.
Answered by Munish Jain
Asked by Sonal Minhas: Why has agriculture NPA remained sticky between Q3 and Q4?
p. 7
“Q4 is not a cash flow period. So the majority of the recovery in agriculture will be coming in Q1 and Q3 because those are the cash flow period.”
Munish Jain, page 7 of the filed PDF · View the filing
Management said early assessment suggests the transition will not be negative for the P&L.
Answered by Munish Jain
Asked by Aditya Mundra: What is the expected impact of the new ECL transition guidance on credit cost?
p. 7
“Initial view is it will not be a P&L negative for the Capital Small Finance Bank.”
Munish Jain, page 7 of the filed PDF · View the filing
Management attributed the decline to a 25 bps rate cut and temporary interest reversals from agri NPAs.
Answered by Munish Jain
Asked by Pritesh Bumb: Why did yield on advances drop from about 11.1% to 10.8%?
p. 11
“there was a 25 basis points rate cut coming in this particular quarter, which has slightly impacted the yield on advances.”
Munish Jain, page 11 of the filed PDF · View the filing
Management said the bank has stopped fresh lending to NBFC-MFI, is recovering existing exposure, and believes provisioning is adequate.
Answered by Munish Jain
Asked by Sagar Shah: What is the status of the NBFC-MFI portfolio and its asset quality?
p. 14
“I strongly believe the pain which was there in this NBFC-MFI segment which has come in Q1 is fully provided for in the current year, and we are not carrying any baggage in the next year.”
Munish Jain, page 14 of the filed PDF · View the filing
Management guided credit cost to remain range-bound between 0.15% and 0.25% for FY27.
Answered by Munish Jain
Asked by Rahil S: What is the credit cost guidance for FY27?
p. 15
“it will be range bound between 0.15% to 0.25% for FY '27.”
Munish Jain, page 15 of the filed PDF · View the filing
Management said the bank's agri customers are relatively resilient given collateralization, crop diversification, and irrigation infrastructure in Punjab and Haryana.
Answered by Munish Jain
Asked by Shreepal Doshi: How will the agriculture portfolio behave given geopolitical tension and monsoon concerns?
p. 12
“we have a lot of levers available that is a multilevel accounts available with that customer, collateralized by more than 200%.”
Munish Jain, page 12 of the filed PDF · View the filing
Management said the underwriting process and data usage are identical across Punjab and non-Punjab states, with only differences in CCH-to-branch ratios.
Answered by Munish Jain
Asked by Rishi Mody: How does underwriting outside Punjab compare to Punjab in terms of data versus relationship-based lending?
p. 20
“the more important thing is in both the states, our underwriting system, our underwriting process is identical.”
Munish Jain, page 20 of the filed PDF · View the filing
Management said they aim to become a holistic financial product provider to customers and close the gap with peer banks' fee income ratios.
Answered by Munish Jain
Asked by Vaibhav Jain: What is the vision for the Banca and other income business?
p. 22
“Our vision is that we intend that all the financial products of our customers shall be sold by us to them.”
Munish Jain, page 22 of the filed PDF · View the filing
Risks flagged
Global environment challenges including Middle East conflict impacting energy markets and commodity pricing
p. 3
“The global environment remains challenging with the Middle East conflict impacting energy markets, elevating commodity pricing and moderating global growth expectations.”
Sarvjit Samra, page 3 of the filed PDF · View the filing
Increased competition for deposits and funding cost pressure across the banking sector
p. 3
“credit growth has remained strong at about 16%, while deposit growth has relatively moderate at 13% to 14%, leading to increased competition for deposits and some pressure on funding costs across the sector.”
Sarvjit Samra, page 3 of the filed PDF · View the filing
Geopolitical and environmental changes affecting credit cost outlook
p. 15
“we are looking at a lot of geopolitical environmental changes, which is happening.”
Munish Jain, page 15 of the filed PDF · View the filing
High flooding-like conditions in Punjab affecting portfolio
p. 16
“we've seen a high flooding-like condition in all of Punjab.”
Munish Jain, page 16 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.