Jana Small Finance Bank Limited — Q4 FY26 earnings call

Call held 29 Apr 2026

Management summary

Jana Small Finance Bank reported a strong Q4 FY26, successfully meeting its guidance for PAT, credit cost, and SMA. The bank demonstrated robust asset and deposit growth of 23% YoY each, driven by secured assets and highest-ever disbursements. Asset quality improved significantly with net credit cost at 0.47% and SMA at 3.66%. While Q4 saw a dip in CASA due to specific withdrawals, the bank expects strong CASA growth in the coming year and aims for improved operating leverage.

Highlights

  • PAT of INR140 crores, meeting guidance for Q4 FY26.

  • Net credit cost at 0.47% for Q4 FY26, down from 0.79% QoQ, expected to sustain low.

  • SMA below 4% at 3.66% by March 2026, lower than March 2024 (3.99%).

  • Assets grew 23% YoY, with secured assets growing 28% YoY, and deposits grew 23% YoY.

  • Highest ever disbursements in Q4 at INR5,372 crores in secured and INR2,522 crores in unsecured loans.

Concerns

  • Q4 CASA saw a 4.8% loss QoQ due to specific government CASA withdrawals.

  • Cost growth in FY26 due to guarantee program (INR55 crores), higher disbursement costs (INR77 crores), and new wage code (INR12 crores).

  • Management is watchful on the MSME segment for potential Middle East war spillover effects, though no impact has been seen yet.

Key financials

  1. PAT ₹140 Cr
  2. Net Credit Cost 0.47%
  3. Gross NPA 2.3%
  4. Net NPA 0.87%
  5. SMA 3.7%
  6. Assets Growth 23%
  7. Deposits Growth 23%
  8. Cost of Funds 7.5%
  9. ROA 1.3%
  10. ROE 13%
  11. CASA Growth 22.6%
  12. LCR 143%

What they filed

Q1 FY27: revenue up 22.1%, net profit up 52.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,166 1,177 1,184 1,241 1,305 +12%1,374 +17%1,445 +22%1,515 +22%
Net profit97 111 123 102 75 −23%10 −91%140 +14%155 +52%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Affordable Housing
    ₹8,174 Cr Book Size₹12.7 lakh Average Ticket Size
  • Micro LAP
    ₹6,300 Cr Book Size₹6.7 lakh Average Ticket Size9.4% Growth
  • MSME Loans
    ₹5,281 Cr Book Size
  • Term Loans to NBFC
    ₹1,935 Cr Book Size
  • Vehicle Loans (2-wheeler & Used Cars)
    79.6% Growth
  • Gold Loans
    ₹2,358 Cr Book Size1.4% Growth

Capital allocation

high confidence
  • Liquidity Liquidity disclosed LCR is very strong at 143%.
    Our LCR is very strong at 143%.

Guidance & targets

Profitability

  • PAT Growth Profitability · next year · High confidence 80% plus
    gross loan portfolio growth of 19% to 21%, deposit growth of 23% to 25% and PAT year-on-year should grow at 80% plus.

    — Ajay Kanwal

Credit Growth

  • Gross Loan Portfolio Growth Credit Growth · next year · High confidence 19% to 21%
    gross loan portfolio growth of 19% to 21%, deposit growth of 23% to 25% and PAT year-on-year should grow at 80% plus.

    — Ajay Kanwal

Deposit Growth

  • Deposit Growth Deposit Growth · next year · High confidence 23% to 25%
    gross loan portfolio growth of 19% to 21%, deposit growth of 23% to 25% and PAT year-on-year should grow at 80% plus.

    — Ajay Kanwal

Asset Quality

  • Net Credit Cost Asset Quality · next year · Medium confidence same range or slightly better at best (than 0.47%)
    But if you take a quarter 4 number of 0.47%, which is a net credit cost, which is on Page Number 5, I think that should give you a good signal of what one should expect. I would probably urge you to view that we'll be in the same range or slightly better at best.

    — Ajay Kanwal

  • CGMFU Recovery Asset Quality · quarter 3 this year · High confidence INR65 crores
    Our rough and ready estimate is we should expect about INR65 crores under CGMFU in quarter 3 this year.

    — Ajay Kanwal

CASA Growth

  • CASA Growth CASA Growth · this year · High confidence 27% to 30%
    So I think we should expect around 27% to 30% growth this year in CASA.

    — Ajay Kanwal

Asset Growth

  • Micro LAP Growth Asset Growth · next year · Medium confidence 12% to 15%
    I do think Micro LAP, which just did about 9.4%, will do better next year. So it will probably be in the 12% to 15% range.

    — Ajay Kanwal

  • Unsecured Book Growth Asset Growth · next year · High confidence 10% to 12%
    unsecured book is expected to grow by about 10% to 12%.

    — K.S. Raman

Cost of Funds

  • Cost of Deposits Cost of Funds · Q1 this year · High confidence decline
    We have seen our quarter 4 pricing for deposits in FY26 lower than FY25. But because most of the deposits are really March maturities, you will see a full impact in quarter 1 this year. So yes, quarter 1 this year, cost of deposits will fall.

    — Ajay Kanwal

  • Cost of Deposits Cost of Funds · after Q1 · Medium confidence stability
    I don't think so. I think we should see at least in our head from what we see customers doing and competition doing, you should expect flat interest rates. So no more decline beyond Q1 is how I would read it.

    — Ajay Kanwal

NIM

  • NIM NIM · Q1 and Q2 · Medium confidence improvement
    So yes, Q1 is deposit -- cost of deposit decline, improvement in NIM due to unsecured. And then Q2 will be flattish cost of deposit and still slight improvement in NIM because of unsecured growing, and you can expect the same behaviour in Q3 and Q4.

    — Ajay Kanwal

Used Car Business

  • Disbursal Run Rate Used Car Business · a month · High confidence INR25 crores
    We are now doing a strong run rate of INR25 crores disbursal a month.

    — Ajay Kanwal

  • Cities of Operation Used Car Business · by September · High confidence 35 cities
    We are operating in 15 cities. We expect to take that up to 35 cities by September.

    — Ajay Kanwal

Operating Efficiency

  • Cost-to-Income Ratio Operating Efficiency · this financial year · Medium confidence below 60%
    What is the guidance on the cost-to-income ratio for this financial year? Can this become can this come down below 60%? ... We will make every attempt to do it.

    — Ajay Kanwal

What to watch in Q1 FY27

CASA Growth

next quarter (Q1 FY27)
Current 22.6% YoY (FY26), -4.8% QoQ (Q4 FY26)
Target 27-30% growth for FY27

Why it matters

To verify if the Q4 dip was temporary and if the bank can achieve its ambitious CASA growth target, which is crucial for cost of funds.

So I think we should expect around 27% to 30% growth this year in CASA.

Risks & concerns

  • Potential spillover effects of Middle East war on MSME segment

    medium

    Management is monitoring the MSME segment for any impact from geopolitical events, though current collections are strong.

    Management watchful

  • Q4 CASA decline due to government-led withdrawals

    low

    A short-notice exit of some government CASA led to a 4.8% QoQ decline in Q4, but the bank aims to recover this and achieve 27-30% CASA growth in FY27.

    Management acknowledged

Q&A highlights

7 direct
NIM improvement sustainability and drivers Direct
what's happening on NIM is 2 things. One is we haven't seen any customer pricing drop in any of our products... What has happened in quarter 4 is because the slippages have reduced, interest in suspense has not increased. So that is one reason why NIM has got better. Second, we have seen a 10% growth in our quarter-on-quarter on unsecured. That's the reason NIM has improved.

Clarifies the two main factors contributing to NIM expansion (stable pricing, reduced slippages, unsecured growth) and suggests sustainability.

Asked by Varun Shivram

Continuation of declining slippages trend in MFI and unsecured segments Direct
unsecured slippages were around INR150 crores in the fourth quarter. It reduced by about 35% in the quarter... the SMA book has also reduced by about 24% and therefore, we do expect the slippages to trend lower during the FY27.

Provides specific figures for slippage reduction and confirms management's expectation for continued improvement in asset quality for these key segments.

Asked by Varun Shivram

Stress signals in other portfolio segments (SME, Micro LAP, Housing) Direct
one is the only slight worry we had was on micro LAP. And if you see our page -- just give me a second. If you see our asset page, which is Page 8. So micro LAP, Varun, last year grew year-on-year only 9.4%. It was the weakest growth amongst all our secured assets. So consciously, we did some tightening across a few geographies, et cetera. We are very comfortable with it.

Identifies Micro LAP as the only segment with a 'slight worry' and explains the proactive measures taken, reassuring about other segments.

Asked by Varun Shivram

Outlook on credit cost percentage for the coming year Direct
But if you take a quarter 4 number of 0.47%, which is a net credit cost... I think that should give you a good signal of what one should expect. I would probably urge you to view that we'll be in the same range or slightly better at best.

Provides clear guidance on the expected credit cost trajectory, indicating stability or slight improvement from current low levels.

Asked by Varun Shivram

Reapplication for universal banking license Direct
So yes, now that our results are out, we would get back to working on resubmitting the application. I think that is what was in our mind because we needed the audited results to be completed. And we have maintained the gross NPA of 3% and 1%. So at least these are not the approval criteria, but these are the gating criteria for an application.

Confirms the bank's intention to reapply and links it to achieving strong audited results and meeting key criteria like GNPA/NNPA.

Asked by Chaitya

Impact of Iran war on portfolio Partial
So this is a very tough one. There is no significant signs. What you can see is sporadic nature of customers... We have not seen more examples like this, but we have to watch out because there will be some impact. It cannot be 0 impact... we are just watching for sectors we have to be careful of in MSME.

Acknowledges potential risk but states no significant impact seen yet, highlighting vigilance in MSME and the benefit of a secured strategy.

Asked by Viral Mehta

CGMFU claims and expected recoveries Direct
No, we have not made any claim from CGMFU in FY26. The claim will start from Q3 of this financial year... Our rough and ready estimate is we should expect about INR65 crores under CGMFU in quarter 3 this year.

Provides a clear timeline and quantified expectation for recoveries from the guarantee program, which will benefit future asset quality.

Asked by Rohit Rokde

Cost-to-income ratio guidance for FY27 Direct
What is the guidance on the cost-to-income ratio for this financial year? Can this become can this come down below 60%? ... We will make every attempt to do it... March '24, our cost income was 57%.

Sets an ambitious target for improving operating efficiency, indicating focus on leveraging past investments and faster revenue growth.

Asked by Suraj Shinde

2 min read 6 chapters

Detailed narrative

Q4 FY26 Performance Exceeds Guidance

Jana Small Finance Bank delivered a strong Q4 FY26, successfully meeting all its previously provided guidance. The bank reported a PAT of INR140 crores, aligning with the INR140-160 crores target. Net credit cost stood at a healthy 0.47%, well within the guided range, and SMA improved to 3.66% by March 2026, below the 4% target and even lower than March 2024's 3.99%. This performance signals a clear exit from the previous stress period.

Robust Asset Quality and Declining Credit Costs

The bank's asset quality showed significant improvement, with net credit cost dropping to 0.47% in Q4 FY26 from 0.79% in the previous quarter, and is expected to sustain at low levels. Gross NPA was 2.33% and Net NPA was 0.87%. Slippages were among the lowest in the last eight quarters at INR334 crores, comparable to Q1 FY25 levels. The total guarantee program now covers 77% of the unsecured book, with INR65 crores in CGMFU recoveries expected in Q3 FY27.

Strong Growth in Assets and Deposits

Assets grew robustly by 23% year-on-year, with secured assets leading the charge at 28% YoY growth, now constituting 72.6% of the book. Deposits also mirrored this strong growth, increasing by 23% YoY to INR35,784 crores. The bank achieved its highest-ever quarterly disbursements in Q4, with INR5,372 crores in secured and INR2,522 crores in unsecured loans.

Improving Margins and Cost of Funds

The bank's net interest margin (NIM) improved due to stable customer pricing, reduced slippages, and 10% QoQ growth in the unsecured portfolio. The cost of funds decreased by 20 basis points QoQ and 50 basis points YoY to 7.46% in Q4 FY26, with further decline expected in Q1 FY27 before stabilizing. Despite a 4.8% QoQ dip in CASA in Q4 due to specific government withdrawals, the bank targets 27-30% CASA growth for FY27.

Strategic Product and Branch Expansion

Jana Small Finance Bank is actively expanding its product offerings, including a credit line on UPI, staff loans against shares, and FX services with its new AD1 license, all expected to go live in FY27. The bank completed 80 branch activities in FY26, including 12 new branches, 26 split branches, and 42 relocations. For FY27, another 78 branch activities are planned, with 38 net additions, bringing the total to 860 branches.

Outlook and Universal Banking Ambitions

For FY27, the bank projects gross loan portfolio growth of 19-21%, deposit growth of 23-25%, and PAT growth exceeding 80% YoY. Following the strong Q4 results, the bank plans to resubmit its application for a universal banking license, confident in meeting the gating criteria like GNPA (2.33%) and NNPA (0.87%). The management believes the bank's diversified portfolio and strong performance position it well for this transition.

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