Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity, falling profits.
In simple words: The company is currently losing money, though profits are falling even as sales grow. The direction of profits is the main factor to watch.
The 60-second version of Utkarsh 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?
Utkarsh Small Finance Bank Limited provides banking and financial services in India. It operates through Corporate/Wholesale Banking, Retail Banking, Treasury, and Other Banking Operations segments.
IndustryBanks - Regional
SectorFinancial Services
Employees18,400
Annual revenue₹1,908 Cr
How does it make money?
Turns over ₹1,908 Cr a year. Of every ₹100 of sales, about ₹-60 reaches shareholders as profit. Each of its 18,400 employees supports ₹10.4 lakh of revenue a year, the signature of a people-led business.
Revenue / employee₹10.4 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.
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?
2 analysts covering the stock expect revenue to grow about 21.3% and earnings to grow about 104.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+21.3%
Est. earnings growth+104.6%
Analysts2
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +4% while net margin moved -373% 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+4%
Margin effect-373%
DalalBaazaar Score
35/ 100
Weak
Weighted across six categories. Every point is explained below.
✗ The business is lossmaking at the net level
• Revenue has compounded at 1.4% a year, which is the base these returns are earned on
• Lender: ROCE is excluded here because borrowing is raw material for this business, not leverage
Quality vs. Valuation
Company Quality
33/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
36/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
EV/EBITDA
—
PEG
—
What's Good / What's Bad
🟢 What's Going Well0
Nothing stands out as clearly improving on the years of data available.
🔴 What Needs Attention1
Return on equity is falling
ROE has dropped from 20.2% to -41.5% — each rupee of shareholder capital earns less than it did.
Red Flags
2 items require attention · 1 high · 1 watch
🔴The company is lossmakingFinancial
Net profit of -₹1,151 Cr in the latest reported year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 62% over 3 years — each existing share owns a smaller slice of the company.
Investment Thesis
🟢 Bull CaseWhat could make this work?
No clear supporting case emerges from the available numbers.
🔴 Bear CaseWhat could go wrong?
Growth barely outpaces inflation
Revenue compounding at 1.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 20.2% to -41.5%. 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.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro 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
1Return on equity stays above 8%✗ -41.5%
For a lender this is the cleanest single read on whether the book is being grown profitably.
2Revenue growth stays above 4% a year✗ 1.4% CAGR
Latest reported year was 234.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
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 · 4 neutral · 4 weak
Market Cap
₹2,367 Cr
Micro Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
0.85x
Reasonable
Reasonable against the company's book value
EPS (TTM)
₹-6.39
Loss-making
Negative earnings per share — the business is losing money
ROE
-41.5%
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
0.91x
Moderate
Moderate leverage
Revenue Growth (YoY)
234.7%
Healthy
Healthy top-line growth
Profit Growth (YoY)
-4956.3%
Falling
Profits are shrinking
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
₹631 Cr
Cash generative
Generates cash even after funding its capex
More Metrics
P/E (Forward)
5.9x
Operating Margin
-10.5%
Weak
Thin margins leave little room for error
Net Margin
-146.1%
Weak
Very little revenue reaches the bottom line
Beta (vs Nifty)
0.99
Market-like
Moves roughly in line with the market
52W Range Position
27%
Mid-range
Mid-range
Technical Snapshot
SMA 20 / SMA 50
13.7 / 14.2
Bearish alignment (short < long)
Price vs SMA 200
Below
Long-term downtrend
RSI (14)
41.0
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹1,828 Cr
₹2,286 Cr
₹2,622 Cr
₹1,908 Cr
+1.4%
PAT (Net Profit)
₹405 Cr
₹498 Cr
₹24 Cr
-₹1,151 Cr
—
EPS
₹3.13
₹4.75
₹0.19
₹-8.37
—
ROE
20.2%
16.7%
0.8%
-41.5%
—
Total Debt
₹2,199 Cr
₹1,845 Cr
₹2,355 Cr
₹2,529 Cr
+4.8%
Free Cash Flow
₹1,497 Cr
₹921 Cr
₹717 Cr
₹631 Cr
-25.0%
🟡 Revenue has been broadly flat over 3 years (1.4% a year).
🔴 PAT (Net Profit) has turned negative, from ₹405 Cr to -₹1,151 Cr.
🔴 EPS has turned negative, from ₹3.13 to ₹-8.37.
🔴 ROE has fallen from 20.2% to -41.5% over 3 years (-61.7 pts).
🔴 Total Debt has grown at 4.8% a year over 3 years.
🔴 Free Cash Flow has shrunk at 25.0% a year over 3 years.
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.
Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.
2 of 2 tripwires tripped — Return on equity stays above 8%; Revenue growth stays above 4% a year · see Key things to watch ↑
