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EQUITASBNK Digital Lending Expansion Will Drive Stronger Profitability Ahead

Digital Adoption And Urbanization In India Will Expand Credit Markets

EQUITASBNK logo
EQUITASBNK
AnalystHighTarget
Not Invested
Published 07 Jul 2025

Update shared on 12 Dec 2025

Fair value Decreased 12%
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AnalystHighTarget's Fair Value
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1Y
-9.0%
7D
-0.3%

Analysts have trimmed their price target on Equitas Small Finance Bank from Rs 97.4 to Rs 85.4, citing a higher required return that offsets improved profit margins and a lower assumed future P/E multiple.

What's in the News

  • Board meeting scheduled on October 31, 2025 to consider and approve unaudited financial results for the quarter and half year ended September 30, 2025 (company filing)
  • Launch of fully digital personal loan offering for salaried professionals, enabling instant, paperless approvals and disbursals (company announcement)
  • Digital personal loan targeted at customers with net take home pay of Rs 40,000 and above and credit scores of 730 and higher, with loan amounts starting from Rs 2 lakh and tenures up to 5 years (company announcement)
  • Interest rates on the new digital personal loan start at 10.49% per annum with a 1% processing fee, positioned to capture festive season credit demand (company announcement)

Valuation Changes

  • The fair value estimate has fallen significantly from ₹97.39 to ₹85.42 per share, reflecting a more conservative valuation despite stronger profitability.
  • The discount rate has risen slightly from 12.73% to 12.86%, indicating a marginally higher required return for investors.
  • The revenue growth assumption has edged down marginally from 20.84% to 20.81%, implying a nearly unchanged outlook on top line expansion.
  • The net profit margin forecast has risen meaningfully from 23.09% to 27.39%, incorporating expectations of improved operating efficiency and profitability.
  • The future P/E multiple has fallen sharply from 9.83x to 6.87x, signaling a lower valuation multiple being applied to the bank's expected earnings.

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