Ujjivan Small Finance Bank Limited (UJJIVANSFB) Earnings Call Transcript
September 1, 2026
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to the Ujjivan Small Finance Bank Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Bharadwaj, Head of Investor Relations. Thank you, and over to you, sir.
Thank you, Sagar. Good afternoon to all. I once again thank all participants for making time at such short notice. I will briefly introduce the forum present for this discussion. We have Mr. B. Prabhakar, Chairman and Independent Director; Ms. Carol Furtado, Whole-time Executive Director; Mr. Sadananda Kamat, Chief Financial Officer; Mr. Ashish Goel, Chief Credit Officer; and Mr. Brajesh Therrien, Chief Risk Officer. I would now request Mr. Prabhakar to share his opening comments without an. Thank you.
Good evening to all of you, and thank you all for joining us at such a short notice. -- we would like to address the recent developments regarding the early retirement of Mr. Sanjay Natal as MD and CEO of Ujjivan SFB. Mr. Natal has not been keeping Godath since mid-July and for a few days, he worked from home. Thereafter, he was on new yesterday and due to continued health concerns aided to tender in his early retirement request to the NRC. This development was taken up by the Board and after due consideration, accepted its request for early retirement. The Board places unrecorded its appreciation for his valuable contributions and stewardship during his tenure. The Board has requested Ms. Carol Furtado, the Executive Director, to take over as interim MD and CEO subject to RBI approval. Ms. Carol is a seasoned banker with over 3 decades of extensive experience across business, strategy, operations, people and institutional functions. Carol is a key member of the leadership team that laid the foundation and build butane throughout the journey. She has consistently taken on complex responsibilities and demonstrated the ability to lead beyond functional boundaries with a strong understanding of people and culture. She is also recognized by developing leaders, empowering teams and building a culture of ownership and accountability. In her role as an Executive Director at Ujjivan, she has contributed significantly to business growth, transformation and organizational development. The NRC has been mandated to search for a successor for Mr. Natyal. On behalf of the Board, I wish to assure all stakeholders that the bank operates with strong governance standards, robust internal controls and a highly experienced management team. our strategic direction, business priorities and execution capabilities continue to deliver our plans. Thank you.
Should we open the floor for questions, sir?
Just a minute, I will now request Carol to address our investors.
Thank you,. Good evening, and thank you all for joining us at short notice. On behalf of the Ogan team, I thank Mr. Natal for his guidance and leadership during his tenure. We wish him good health. I would like to thank the Board for placing its trust in me as I take on these additional responsibilities. I assure the Board and all stakeholders that I will do my utmost to meet their expectations. Additionally, I assure all stakeholders of our continued commitment to our stated objectives. As you are aware, -- our performance in recent quarters across liabilities and various asset products has gained momentum. Our performance across loan book growth and asset quality has resulted in a pristine and diversified loan book. Q1 loan book growth of approximately 29% year-on-year with GNPA at 2.2% and is testament to our continued execution. Our strategic priority of diversifying the loan book has resulted in the secured book share growing past 50%. The diversification strategy is well on its trajectory. Funding this growth has also been done with due care and at minimal cost. Even though the market has been under a lot of pressure on the deposit front, the bank has been able to grow the CASA book at a healthy 38% year-on-year with overall cost of funds at 6.9% for Q1. People strategy is a large part of OGA. The mix of internal and acquiring the right talent from the market has been the cornerstone of our consistent performance. Today, we are happy to announce the joining of Mr. Vikas Agarwal as Business Head, MSME. Vikas is a chartered accountant and a seasoned banker with over 25 years of experience across MSME, business banking, retail banking, credit, product development and distribution. Our performance post Q1 retains the momentum both on business as well as strategic expense planned for FY '27. Asset quality trends both on secured and unsecured businesses have tracked better or in line with the Q1 performance. As we look ahead, the festive season looks promising, backed by our capacity additions supported by robust domestic economic performance. This will be further augmented by the brand campaign poised for launch during the festive season. We remain on track to meet our FY '27 guidance. The Ujjivan team is committed to delivering strong performance in FY '27 and beyond with no change to the strategy previously outlined and communicated. I would like to reiterate that the bank has continued to strengthen the depth of the Board and management team. This experienced leadership team has navigated the evolving business environment effectively and delivered strong results. We remain confident in our ability to meet stakeholder expectations in the forthcoming quarters. I hand over back to the moderator.
[Operator Instructions] Your first question comes from the line of Renish Harish Gua with ICICI.
Thanks for the opportunity in my is tender for Mitel. Sir, just 1 question on the FY '27 guidance side. I mean, although we already have a good approval to raise capital -- but let us say, because of this management change, if the capital raise has to delay. Does it have -- or it will have any impact on our growth momentum maybe over the next 2 to 3 quarters?
Thank you, Renish. We remain on track to meet our FY '27 guidance, and we are committed to delivering a strong performance we remain well capitalized and committed to our growth plans for FY '27.
Okay. So this -- I mean, the management bridging, if it all, has to delay cataraising, that will not have any viewing on our FY '27 performance is what you are trying to in.
You are correct.
Okay. And if I may allow for the second question or can I just myself -- so second, of course, on this -- the talent pool which you sort of highlighted in the opening remarks. So going ahead, obviously, we have to submit 2 names to the regulator -- so is there any initial discussion around who could be the successor to send, sir?
We are starting the search process. In the normal course, we wanted to start somewhere in October, November. But because of this Satya's early retirement, we are starting this such process quickly. And we are hopeful that in about 3 to 4 months' time, we should be able to complete this process.
So 3 to 4 months, you will submit names to the regulator? Or you're expecting by 3, 4 months will sort of get the new MD.
No, I think in 3 to 4 months, we'll be able to submit the names to the RBI.
Okay, okay. And after that, I'm in assuming 3 months cooling period, I think it will take at least 6 months for any new candidates to join, right?
Yes, we'll factor that while we're identifying the candidates, how quickly they will be able to join and accordingly this take account. Me to say anything on that at this stage yes.
Your next question comes from the line of Avinash Singh with Emkay Global.
Yes. And with Mr. Nota of very quick probably and better health and also thanks to the new management team -- the question is what that, of course, given that now we have nearly, I mean on the -- at the beginning of FY '28 when we expect the new replacement permanent replacement to come in. Does you see any manner, of course, I mean, you have capital right now adequate to support 2 plants. If this capital base to be delayed, does it any way alter your kind of the transition plan, the journey I mean from the SRB to eventually the Universal Bank that, of course, that is driven by invisecured asset, higher growth in dose area. Does it any way kind of alter delays those processes is like going to business as usual and nothing changed at that you need towards universal bank consol.
Thank you, Avinash. As I stated earlier, we remain on track to meet our FY '27 guidance and our growth plans. And we are well capitalized to meet these growth plans for FY '27. Also, just to state, our strategic diversification is also well on its trajectory.
Yes. So I mean any sort of a time line which we have to approach RBI again with that recent universal bank? Or for now, I mean, it is kind of a. If you will take it at a later stage?
We would not like to comment on that. We are quite focused on meeting the goals that we have already laid down and diversification strategy is, again, as I say, well on its trajectory. So yes, we are proceeding towards that.
Your next question comes from the line of Pritesh Bumb with DAM Capital Advisors.
First of all, the publication for Motion was stating and taking into light. My question was more of a clarity. I just wanted -- you mentioned that the search process will be taken expedited. I wanted to check that we'll also consider internal candidates, right? And when Carina be interested to be only after right now interim later on as a manning.
We definitely consider internal candidates, and I'm sure Carol is very serious candidate now, and she has also expressed a disolto be candidate or a regular position as.
Sure. Second question was in continuation with some of the stated goals, especially in terms of business mix changes -- and with the new MSM head coming in, will we see any expedited change in growth strategy in terms of mix? And any further addition of team members left within the organization, this is it.
See, we will remain committed to the FY '27 guidance. We also, on the MSME front, we are going as per what we have planned ourselves for this financial year. The guidance terms will be met -- and we could share more details in the Q2 earnings call.
Next question comes from the line of Shailesh Kanan with Amec.
Yes. Good evening, everyone, and thanks for the opportunity. Of course, thanks a lot for raising this call. business clarity. So my first question is to abate. Just a clarification, just a further update on this. So given the activeness -- can you management also if you can confirm there is no material factor, right, apart from Sense help for this certain exit.
No, absolutely, no. Absolutely no. I think it is this personal call. But absolutely, there is no issue with regard to the business strategies are you working on the bank. I can assure you on that.
That's helpful. second question of mine. So we have had this a little bit instability at the leadership level in the past -- so are we thinking something specifically at the board level for any different seeing something differently this time. So that this thing doesn't happen against like a 2G or something like that. Are there any plans on that front?
No, we appreciate your concern, but -- this came up suddenly. Otherwise, Mr. Natal had an expert term of nearly about a year. And he had also not expressed any his intention not to seek a second time. So we did not feel the urgency at that point of time, but we will definitely keep it in mind in future to really have a more robust succession planning in entities.
Yes, sure. Sure. That's helpful. Sir, last question from my side, if Karamannswer. In first quarter earnings call, we have kind of mentioned that more than West Asia prices the impact would be something would be key monitorable from an asset quality perspective and growth perspective. And in your opening remarks, ma'am, you have said that everything is on track. In fact, the trends are in line or better. So how should we read in terms of no impact better? Should that be the right way of thinking about it.
See, we -- like I said in my opening remarks, we have tracked better on both the secured and unsecured businesses are in line with the Q1 performance. As of now, we don't see any deviation from.
So from the earlier kind of expect all kind of trends or end of implications, we are not seeing any major impact on the neo. Is that the right understanding, right now?
Nothing. Absolutely nothing.
Thank you. Your next question comes from the line of Ashlesh Sonje with Kotak Securities.
Just 1 question from my side. For the external candidates that we'll consider, what is the typical design profile that you would look for?
No, those details are being still working out. Probably we'll be able to share it later at.
Ladies and gentlemen, as there are no further questions, that concludes our question-and-answer session. I now hand the conference over to Ms. Carol Furtado, Executive Director for closing remarks. Over to you, ma'am.
Thank you. Thank you all for joining this call. I once again reiterate that we remain confident to delivering a strong performance in FY '27 and beyond. Thank you. Have a good evening.
Thank you. On behalf of Ujjivan Small Finance Bank Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.
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