Jana Small Finance Bank Ltd (JSFB) Q2 2027 Earnings Report

The call was strongly positive overall. The bank reported its highest-ever quarterly PBT, first-half profit equal to the prior full-year PAT, improved margins, lower funding costs, stronger secured-asset growth, better asset quality, and raised PAT growth guidance to 100%. The main challenges were weaker CASA and deposit growth relative to targets, a flat gold loan quarter, subdued Micro LAP and unsecured growth, regulatory uncertainty around insurance income, and drought-related slippage risk. Management nevertheless expressed confidence in achieving its revised guidance and maintaining credit costs below 2%.

Management revised PAT guidance from 80% in profitability PAT growth to 100% in PAT growth, saying it should double PAT this year versus last year; credit cost is expected to be under 2% this financial year, with second-half credit cost lower than the first half and slippages lower in Q3. Advances guidance remains 19%-21% and deposits guidance 23%-25%, with CASA expected to come to the 20% range and cost of funds to remain around 7.4%; secured assets are intended to be around 80%, with the year likely finishing around 75%, and NIMs are expected to be around these levels, with maintaining 7.5% considered a good job. Cost-income is expected to remain below where reported for September, while below 60% is achievable but this year likelihood probably is low; 57% is the first goal. Gold loans are expected to return to a 30%-40% growth rate, or about 10% a quarter comfortably from Q3, Micro LAP may improve from 3% to maybe just 7%-8%, MSME is expected to be a 25%-30% growth rate business, if not more, for a sustainable period, both this year and the next year, affordable housing growth is expected to sustain from 28% year-on-year, and 78 branches are planned, of which 40 have been opened.