• Loan growth outlook: Equitas Small Finance Bank expects full-year advance growth to significantly exceed its initial 20% guidance following ~28% growth in Q1 and higher in Q2, with strong growth targeted over the next two to three years.
• Portfolio diversification: Lending is spread across small business loans (40%), used vehicles (25%), affordable housing (13–14%), microfinance (10–11%), and other segments, with microfinance asset quality stabilizing following an industry-wide deleveraging.
• Credit cost guidance: Full-year credit costs are expected to beat the 1.5% guidance after coming in at 1.35% in Q1, supported by lower gross NPA slippages and improved recoveries.
• Margin contraction expectations: Net interest margins are projected to decline by 15–20 basis points from Q1's 7.24% due to increased deposit rates and potential rate hikes impacting the 80% fixed-rate book, though lower cost-to-assets and credit costs are expected to offset the impact on operating profit.