Jana Small Finance net profit more than doubles to 170 crore rupees in second quarter
Key Facts
Jana Small Finance Bank reported net profit of 170 crore rupees for the quarter ended September 2026, more than double year on year, while pre-tax profit came in at the same level, its highest quarterly reading for the metric in the bank’s history. Pre-tax profit rose from 75 crore rupees in the second quarter of fiscal 2026 to 170 crore rupees in the corresponding period of fiscal 2027. The bank said first-half fiscal 2027 pre-tax profit matched the total pre-tax profit for the entire previous fiscal year. Net profit for the first half was 326 crore rupees, nearly equal to the net profit recorded for all of fiscal 2026. The board approved the unaudited results for the quarter and half year ended September 30 at its meeting on October 23, while the limited review found no modified conclusion.
Profit growth came alongside a 35% year-on-year rise in net interest income to 819 crore rupees, from 608 crore rupees in the corresponding period. Net interest margin widened to 7.5% in the September quarter, compared with 6.5% a year earlier. Pre-provision operating profit also rose 33.9% year on year to 374 crore rupees, while provisions stood at 203 crore rupees. Sequentially, net profit increased from 155 crore rupees in the first quarter of fiscal 2027 to 170 crore rupees, a gain of 9.7%. Basic earnings per share rose to 16.12 rupees, from 7.13 rupees in the second quarter of fiscal 2026.
The report attributed the improvement in profitability to wider margins, loan portfolio growth and lower operating costs. Gross loan portfolio stood at 38,752 crore rupees on September 30, up 22% year on year. Secured assets grew 24%, compared with a 17% increase in unsecured assets. Secured loans rose to 73.7% of the total portfolio, approaching the bank’s stated strategy of raising the share to 80%. This mix combines lending growth with the stated shift toward secured assets, as loan quality indicators diverge.
Gross non-performing loans stood at 2.17% of total loans, down from 2.8% a year earlier, while net non-performing loans rose to 1.08% from 0.9% in the second quarter of fiscal 2026. The bank said it expects the net ratio to fall below 1% after claims worth 68 crore rupees filed under guarantee schemes are accounted for. The bank expects to receive these claims in the December 2026 quarter. The bank thus tied its outlook for improvement in the net indicator to collection of those claims, while the gross indicator remained below its level a year earlier. The figures present a mixed picture of asset quality: an improvement in gross non-performing loans and an annual increase in net non-performing loans.
On the funding side, total deposits grew 17% year on year to 38,221 crore rupees at the end of September. Current and savings account deposits rose 13%, while term deposits increased 19%. But the current and savings account deposit ratio fell to 17.6% from 18.3% a year earlier. Capital adequacy stood at 20% on September 30, compared with 20.7% on the same date a year earlier. Chief Executive Ajay Kanwal said the bank continues to invest in digital and AI-enabled operations, adding: "We are strongly focused on improving current and savings account deposits in the second half."
The bank raised its guidance for net profit after tax growth in fiscal 2027 to 100% year on year. In the market, the stock closed at 383.15 rupees on the National Stock Exchange of India on October 23, down about 5%. The stock had fallen 14% to 424.30 rupees during trading on October 19, amid reports that there were no active discussions about Federal Bank acquiring a stake. The fiscal-year profit guidance comes after first-half net profit nearly matched the full previous fiscal year’s total. The bank expects to receive the 68 crore rupees in guarantee claims in the December quarter, the timing it linked to its forecast that the net non-performing loan ratio will fall below 1%.