Why Equitas Small Finance Bank Share Price is Falling?

As of today, August 11, 2025, the Indian stock markets are showing positive movement. The BSE Sensex is trading above 80,000 points, currently at around 80,045, up approximately 187 points or 0.23%. The NSE Nifty 50 is also up, hovering around 24,424, gaining about 60 points or 0.25%.

The broader markets are also up, with BSE MidCap rising 0.57% and SmallCap up 0.31%.

One stock that is falling sharply is the stock of Equitas Small Finance Bank. Here are some reasons for a 5.5% fall in the stock on 11, August 2025.

2 Reasons Why Equitas Small Finance Bank Share Price is Falling?

#1 Q1 FY26 Results

One of the top reasons for a fall in the stock price is subdued performance for Q1 FY26.

The bank reported a net interest income (NII) in Q1 FY26 of Rs 7,857m, as against Rs 8,015 m in the corresponding period of last year.

The bank slipped into losses reporting a loss of Rs 2,240 m, as against a net profit of Rs 258 m YoY.

Equitas Small Finance Bank made one-time additional provisions of Rs 3,300 m during the quarter, resulting in net profit miss. The bank reporting a loss came as a surprise to investors, which resulted in a drop in the stock price.

#2 Stress in Microfinance (MFI) Book

Investors were worried about the ongoing stress in the books towards MFIs loans. There are fears that going forward too provisions may be high in this regard. However, it is pertinent to point out that the gross non-performing (GNPA) and net-non performing (NNPA) assets of the bank saw an improvement.

GNPA improved by 7 bps QoQ to 2.82% in Q1 FY26 as compared to 2.89% in Q4 FY25. The NNPA improved by 3 bps QoQ to 0.95% in Q1 FY26 as compared to 0.98% in Q4 FY25.

What Next?

Despite the losses, the bank had a decent performance in terms of a few other parameters, Advances grew by 8% YoY supported by 18% growth in non-MFI advances. Deposits grew 18% YoY.

However, gross advances growth remained muted at 8% YoY and flat QoQ as the microfinance loan book contracted. The non-microfinance book grew 18% YoY.

Going forward, there are challenges for the sector. Small finance banks in particular are facing significant stress in their microfinance portfolios due to rising borrower defaults, weakening repayment capacity, and regulatory constraints.

Small finance banks have experienced the sharpest decline in microfinance loan disbursements. We are already seeing this in the case of Equitas Small Finance Bank, which saw its microfinance loan book contracting.

Small finance banks are more affected by microfinance stress than other lenders primarily because they have a larger exposure and deeper involvement in microfinance lending, which makes them more sensitive to the specific risks of this segment.

Investors will need to watch a few more quarters to see how things in the sector pan-out.

How Shares of Equitas Small Finance Bank have Performed Recently

Over the last one month, the share price of Equitas Small Finance Bank has lost 17% from levels of Rs 63.45 to the current levels of Rs 53. In the past one year, shares of the company have gained 31%.

The stock hit a 52-week high of Rs 86.90 on 6 September 2024. The stock also hit a 52-week low of Rs 52.02 on 7 April 2025.

About Equitas Small Finance Bank

Equitas Small Finance Bank is a leading small finance bank in India that focuses on providing banking services primarily to the financially unserved and underserved segments of the population.

It began operations in September 2016 after receiving a license from the Reserve Bank of India and has expanded its presence across multiple states in India with a significant portion of transactions occurring digitally. Equitas Small Finance Bank also offers various digital and co-branded banking products including partnerships with companies like Niyo and HDFC Bank.

To know more, check out Equitas Small Finance bank fact sheet and latest quarterly results. You can also compare Equitas Small Finance Bank with its peers on our website.

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Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

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