Equitas Small Finance Bank Limited Q2 FY25 Concall Decoded: Microfinance on fire, deposits calm the nerves, management plays defence
1. Opening Hook
When microfinance sneezes, small finance banks catch a cold—and Equitas Small Finance Bank walked into Q2 FY25 with a full-blown seasonal flu. Industry-wide MFI stress, rising SMAs, and upfront provisioning made sure no one left this concall humming optimistic tunes.
But before you panic-sell, management reminded everyone that 84% of the book is behaving like a disciplined topper, while only the remaining MFI kid is bunking classes. Deposits are growing, FD rates are cooling, treasury is minting quietly, and new products are warming up in the dugout.
This was not a “growth guidance” call. It was a damage-control-with-transparency call. And yes—Vasudevan & team chose to take the pain upfront rather than drip-feed bad news later.
Read on. The real story lies between buffers, buckets, and borrower behaviour.
2. At a Glance
NII ₹802 crore – Stable engine, no fireworks.
Other income ₹229 crore – Treasury quietly saved the quarter.
PPOP ₹350 crore (+6% YoY) – Operating core still breathing.
Credit cost ₹330 crore – Microfinance hogged the blame.
Extra MFI provisions ₹146 crore – Management chose aspirin over denial.
PCR 67.7% – Safety belt tightened aggressively.
3. Management’s Key Commentary
“The first six months have been turbulent due to microfinance stress.” (Translation: We’re not sugarcoating this—MFI is hurting.) 😐
“74% of deposits are retail and holding up well.” (Translation: At least liabilities aren’t misbehaving.)
“We reduced peak TD rates from 8.5% to 8.25%.” (Translation: Cost of funds relief, slowly loading.)
“We made ₹146 crore extra provisions in microfinance.” (Translation: Take the pain now, sleep better later.) 😏
“We need slippages to halve to stabilize MFI.” (Translation: Still not out of the woods.)
“84% of the book has credit cost of just 1.04%.” (Translation: Please don’t judge us only by MFI.)
