Equitas Small Finance Bank Limited

Financial Services — Banks - Regional · NSE

₹70.50+₹2.22 (+3.25%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Equitas Small Finance Bank Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Equitas Small Finance Bank Limited provides various banking products and services to individuals and corporates, and micro, small, and medium enterprises in India.

IndustryBanks - Regional

SectorFinancial Services

Employees28,058

Annual revenue₹4,296 Cr

How does it make money?

Turns over ₹4,296 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit. Each of its 28,058 employees supports ₹15.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹15.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are HDFC BANK LTD, ICICI BANK LTD., KOTAK MAHINDRA BANK LTD, AXIS BANK LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE13.8%

What is the outlook?

19 analysts covering the stock expect revenue to grow about 17.8% and earnings to grow about 31.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+17.8%

Est. earnings growth+31.7%

Analysts19

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +41% while net margin moved -87% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+41%

Margin effect-87%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 12.1% is steady
✗ Profit has declined at 43.6% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 29.9% in the latest year

Quality vs. Valuation

Company Quality

59/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

72/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

15.8x

3Y Median

20.8x

40 monthly readings · mean 31.6x · range 7.8x–82.2x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 24% below its 3y median of 20.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 17.0x.

vs. its own history

Cheap

20.8x median over 40 months · -24%

vs. sector peers

Fair

17.0x median of 4 peers · -7%

vs. generic bands

Fair

15x–35x

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 11.1% to 1.7% — each rupee of shareholder capital earns less than it did.

Red Flags

1 item require attention · 1 watch

🟡Profit is decliningFinancial
Net profit is down 82% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 24% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Returns on shareholder capital are falling
ROE has dropped from 11.1% to 1.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 9% a year✓ 12.1% CAGR
Latest reported year was 19.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2Return on equity stays above 8%✗ 1.7%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 20.8x✓ 15.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹8,066 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.8x

Fair

Fairly valued against the generic band

P/B Ratio

1.32x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.46

Profitable

Profitable on a per-share basis

ROE

1.7%

Weak

Weak capital efficiency

ROCE

Not meaningful

N/A for lenders

Banks and NBFCs don't report capital employed the way other businesses do

Debt/Equity

0.94x

Moderate

Moderate leverage

Revenue Growth (YoY)

19.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-29.9%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹3,509 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

7.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

31.5%

Good

Healthy core-business profitability

Net Margin

10.9%

Good

Strong bottom-line conversion

Beta (vs Nifty)

0.46

Defensive

Steadier than the market

52W Range Position

59%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

69.0 / 72.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

60.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,048 Cr	₹3,752 Cr	₹4,066 Cr	₹4,296 Cr	+12.1%
PAT (Net Profit)	₹574 Cr	₹799 Cr	₹147 Cr	₹103 Cr	-43.6%
EPS	₹4.67	₹7.01	₹1.29	₹0.9	-42.2%
ROE	11.1%	13.4%	2.4%	1.7%	—
Total Debt	₹2,974 Cr	₹1,788 Cr	₹2,137 Cr	₹5,773 Cr	+24.7%
Free Cash Flow	-₹1,263 Cr	₹3,470 Cr	₹1,692 Cr	-₹3,509 Cr	—

🟢 Revenue has grown at 12.1% a year over 3 years.

🔴 PAT (Net Profit) has shrunk at 43.6% a year over 3 years.

🔴 EPS has shrunk at 42.2% a year over 3 years.

🔴 ROE has fallen from 11.1% to 1.7% over 3 years (-9.4 pts).

🔴 Total Debt has grown at 24.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹60,610 Cr

Total Liabilities

₹54,486 Cr

Cash & Equivalents

₹5,666 Cr

Operating Cash Flow

-₹3,316 Cr

Capex

-₹193 Cr

Shareholding (proxy)

Institutional Holding

55.4%

Insider Holding

12.2%

Corporate Actions

Ex-Dividend Date

09 Aug 2024

Analyst Consensus

Recommendations

18 Buy · 0 Hold · 1 Sell

Target Price (Mean)

₹86.53

+22.7% vs CMP

Target Range

₹64 – ₹98

Peer Comparison

Company	P/E	ROE
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%
KOTAK MAHINDRA BANK LTD	21.9x	11.2%
AXIS BANK LIMITED	14.5x	13.4%

Recent News

3 mixed3 general

Equitas Small Finance Bank (NSEI:EQUITASBNK) Stock Forecast & Analyst Predictions

Simply Wall Street, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Equitas Small Finance Bank Ltd (EQUITASBNK) Share Price

Business Today, 16 Oct

Equitas Small Finance Bank (EQUITASBNK) Share Price Falls 5.24% Today

Univest, 25 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

EQUITASBNK Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Stocks to buy: Ganesh Dongre of Anand Rathi recommends Larsen and Toubro, Equitas, Bajaj Finance shares | Target, SL

Livemint, 18 Oct

Equitas Small Finance Bank Ltd is Rated Buy

MarketsMojo, 16 Oct

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Valuation

MiddlingProfitability · Risk

WeakGrowth

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

1 of 3 tripwires tripped — Return on equity stays above 8% · see Key things to watch ↑