Utkarsh Small Finance Bank reported a challenging FY26 with a net loss of ₹1,151 Cr, a sharp reversal from last year's profit.

Q4 also saw a net loss of ₹188 Cr, reflecting pressure on operating profits.

Gross Loan Portfolio slightly contracted by 1.7% to ₹19,332 Cr as the bank strategically de-risked.

Non-JLG loans grew 29.5% YoY, increasing their share to 70%. Total deposits grew 0.4% YoY to ₹21,654 Cr, boosted by strong retail term deposits (+19.6%) and CASA (+10.6%, now 24%). The bank is actively diversifying its asset mix, with secured loans now 51%. Key strategies include expanding retail deposits geographically, leveraging its >1,100 banking outlets, and boosting operational efficiency through tech and infrastructure investments.

Recent positives include a ₹950 Cr Rights Issue in Nov 2025. Asset quality improved significantly, with Gross NPAs dropping to 7.7% and Net NPAs to 3.3%. Micro-banking collection efficiency also rose to 87% in Q4. Management targets 25-30% portfolio growth, ~15% Return on Equity, and ~55% secured loans in 2-3 years, supported by new Core Banking system implementation and advanced analytics.