ESAF Small Finance Bank Limited (ESAFSFB) AI Stock Analysis

• Market Cap: ₹14.43B
• Dividend Yield: 2.64%
• Average Volume (3M): 22.82K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.17
• Revenue Growth: -8.71%
• EPS Growth: -2192.08%
• Country: IN
• Employees: 5,479
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.14
• Shares Outstanding: 515,604,100
• 10 Day Avg. Volume: 23,527
• 30 Day Avg. Volume: 22,820
• PEG Ratio: 0.01
• Price to Book (P/B): 0.69
• Price to Sales (P/S): 0.31
• P/FCF Ratio: -3.48
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 52 Neutral
• Price Target: ₹29.00 ▲(12.93% Upside)

The score is held down primarily by weak financial performance, especially negative profitability (net and EBIT margins), negative ROE, and negative operating/free cash flow despite strong revenue growth and improved leverage. Technicals add some support with the price above key moving averages and a mildly positive MACD, though an elevated RSI suggests limited near-term upside. Valuation is mixed: a positive dividend yield helps, but the negative P/E reflects loss-making operations.

Positive Factors

Strong revenue growth (73.92%)

Sustained 73.92% revenue growth reflects meaningful expansion of the loan book and customer base in core retail and microfinance segments. Over a multi-month horizon, this supports scale economies, greater market presence, and potential for recovery in margins if cost controls and credit quality are maintained.

Improved leverage (debt-to-equity 0.72)

A lower debt-to-equity ratio (0.72) signals better leverage management and reduced solvency risk. This durable improvement enhances financial flexibility for funding loan growth, meeting regulatory capital norms, and absorbing shocks without immediate reliance on costly external financing.

Inclusive banking focus: underserved customers

A business model centered on underserved and unbanked segments taps structural demand for financial inclusion in semi‑urban and rural India. This durable market position drives deposit mobilization, sticky customer relationships, and niche expertise in microfinance products that can sustain revenue streams over several months and beyond.

Negative Factors

Negative profitability margins

Persistently negative net and EBIT margins indicate operational inefficiency or elevated provisioning that erodes earnings power. Over the medium term, this undermines retained earnings, limits reinvestment capacity, and raises the risk that the bank cannot convert revenue growth into sustainable profitability without structural cost or credit improvements.

Negative return on equity (-26.75%)

A negative ROE of -26.75% signifies capital destruction and poor shareholder returns. Structurally, this weakens investor confidence and limits internal capital generation, making it harder to raise equity or expand the balance sheet without diluting shareholders or increasing leverage, constraining long-term growth.

Negative operating and free cash flow

Negative operating and free cash flow point to liquidity stress and reliance on external funding to sustain lending. Over months, this constrains loan origination, increases funding cost vulnerability, and could pressure compliance with regulatory liquidity metrics unless cash generation reverses or capital injections occur.

ESAF Small Finance Bank Limited Business Overview & Revenue Model

Company Description

ESAF Small Finance Bank provides banking products and services in India. It offers savings, current, and NRI accounts; fixed, recurring, and social deposits; and debit cards. The company provides used and new car, two and three-wheeler, light commercial vehicle, school, personal, lease rental discounting, education, dairy development, MSME, dream home, clean energy, business, micro housing, gold, agricultural loans, and other loans; salary overdrafts and loans against property; micro-finance; payment services; national pension system; investment products; mobile, Internet, and SMS banking, etc.; and other banking services. The company was founded in 1992 and is based in Thrissur, India. ESAF Small Finance Bank is a subsidiary of ESAF Financial Holdings Private Limited.

How the Company Makes Money

ESAF Small Finance Bank generates revenue primarily through the interest earned on loans and advances provided to customers. This includes personal loans, business loans, and microfinance products. The interest rate charged on these loans is typically higher than the interest paid on customer deposits, creating a net interest margin that contributes significantly to the bank's profitability. Additionally, ESAFSFB earns fees from various banking services, such as account maintenance, transaction fees, and other ancillary services. The bank may also engage in partnerships with government programs and NGOs to facilitate financial inclusion initiatives, which can enhance its client base and, subsequently, its revenue streams.

ESAF Small Finance Bank Limited Financial Statement Overview

Summary

Strong revenue growth (73.92%) is a major positive, but profitability is weak with negative net margin (-12.04%) and negative EBIT margin (-16.01%). Balance sheet leverage has improved (debt-to-equity 0.72), yet shareholder returns are poor (ROE -26.75%). Cash flow is pressured by negative operating and free cash flow, raising liquidity concerns.

Income Statement

The company has shown strong revenue growth of 73.92% in the latest year, indicating a positive trajectory. However, the negative net profit margin of -12.04% and negative EBIT margin of -16.01% highlight significant profitability challenges. The gross profit margin remains healthy at 29.30%, but the overall profitability is concerning due to the negative net income.

Balance Sheet

The debt-to-equity ratio has improved to 0.72, indicating better leverage management compared to previous years. However, the return on equity is negative at -26.75%, reflecting poor returns for shareholders. The equity ratio is not directly provided, but the improvement in debt management is a positive sign.

Cash Flow

The company faces challenges with negative operating cash flow and free cash flow, indicating liquidity issues. The free cash flow to net income ratio of 1.66 suggests some efficiency in converting net income to cash, but the overall cash flow position is weak, with a significant decline in free cash flow growth.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	42.15B	43.29B	42.60B	30.73B	21.48B	10.51B
Gross Profit	23.88B	25.19B	28.11B	20.55B	13.55B	10.51B
EBITDA	-8.87B	-6.34B	6.21B	4.48B	875.06M	1.70B
Net Income	-6.65B	-5.21B	4.26B	3.02B	547.32M	1.05B
Balance Sheet
Total Assets	0.00	271.78B	260.87B	202.24B	177.08B	123.39B
Cash, Cash Equivalents and Short-Term Investments	0.00	19.79B	14.23B	7.67B	15.12B	18.19B
Total Debt	0.00	14.06B	25.73B	26.80B	22.57B	15.48B
Total Liabilities	-19.49B	252.29B	235.95B	185.09B	162.96B	109.87B
Stockholders Equity	19.49B	19.49B	24.92B	17.15B	14.12B	13.52B
Cash Flow
Free Cash Flow	0.00	-3.85B	7.94B	-6.42B	5.34B	2.81B
Operating Cash Flow	0.00	-2.32B	8.65B	8.79B	5.88B	3.31B
Investing Cash Flow	0.00	-7.69B	-5.83B	-5.73B	-9.82B	-6.38B
Financing Cash Flow	0.00	15.57B	54.37B	22.50B	50.74B	26.24B

ESAF Small Finance Bank Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 25.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:ESAFSFB, the sentiment is Neutral. The current price of 25.68 is below the 20-day moving average (MA) of 27.40, below the 50-day MA of 26.69, and below the 200-day MA of 29.43, indicating a neutral trend. The MACD of 0.46 indicates Negative momentum. The RSI at 54.31 is Neutral, neither overbought nor oversold. The STOCH value of 36.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:ESAFSFB.

ESAF Small Finance Bank Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
JSFB	62 Neutral	₹37.91B	9.20	―	―	13.36%	-50.07%
UJJIVANSFB	60 Neutral	₹126.67B	25.60	―	2.82%	6.15%	-64.12%
SURYODAY	57 Neutral	₹14.73B	21.51	―	―	―	―
EQUITASBNK	56 Neutral	₹79.88B	-118.24	―	1.63%	10.02%	-120.18%
ESAFSFB	52 Neutral	₹14.43B	-3.87	―	2.64%	-8.71%	-2192.08%
UTKARSHBNK	45 Neutral	₹24.20B	-2.34	―	2.82%	2.35%	-261.81%

ESAF Small Finance Bank Limited Corporate Events

ESAF Small Finance Bank Updates on RBI Nod for Promoter’s Revised Scheme of Arrangement

ESAF Small Finance Bank Limited has disclosed that it has received a communication from the Reserve Bank of India stating that the revised Scheme of Arrangement submitted by its promoter, ESAF Financial Holdings Private Limited, has been taken on record, subject to compliance with applicable laws and regulations. While the bank is not a party to this scheme, it noted that the arrangement and related regulatory communications affect its promoter shareholding and dilution milestones, prompting the disclosure under SEBI listing obligations, with a commitment to provide further updates as required.

ESAF Small Finance Bank Completes Successful Postal Ballot via E-Voting

ESAF Small Finance Bank Limited has announced the successful completion of a postal ballot through remote e-voting, where the resolutions outlined in the notice dated November 11, 2025, were passed with the requisite majority. This development, confirmed by the scrutinizer’s report, reflects the bank’s adherence to regulatory requirements and its commitment to transparent governance, potentially strengthening its position in the financial services sector.

ESAF Small Finance Bank Announces Strategic Asset Sale and Board Restructuring

ESAF Small Finance Bank Limited announced the outcome of its Board meeting held on December 12, 2025. The Board approved the sale of non-performing assets and written-off loans worth up to ₹1700 crores to an Asset Reconstruction Company, with a 94% provision on the pool. Additionally, the bank noted the retirement of several directors and approved the reconstitution of its Board committees. These changes may impact the bank’s operational strategy and governance structure, potentially affecting its market positioning and stakeholder relationships.

ESAF Small Finance Bank Reports Robust Growth in Secured Loans and Retail Deposits

ESAF Small Finance Bank reported strong financial results for the quarter ending September 30, 2025, with significant growth in secured loans and retail deposits. The bank’s total business grew by 5.2% year-on-year, driven by a 161% surge in secured loan disbursements and a 5.9% increase in total deposits. The bank’s strategic shift towards a secured lending mix is evident as secured loans now make up 82% of total disbursements. The bank also narrowed its net loss to ₹116 crore from ₹190 crore in the previous year, reflecting improved operational performance. The CASA ratio improved to 26.4%, and the bank’s capital adequacy ratio stood at 22.4%. ESAF added nearly two lakh new customers, expanding its customer base across 24 states and 2 union territories.

ESAF Small Finance Bank Allots Shares Under Employee Stock Option Scheme

ESAF Small Finance Bank Limited has announced the allotment of 10,554 equity shares under its ESAF Employee Stock Option Scheme 2019. This move, approved by the Nomination, Remuneration, and Compensation Committee, reflects the bank’s ongoing efforts to incentivize and retain its employees. The shares, issued at a face value of Rs. 10 each, will be listed on both BSE and NSE, and are expected to align with existing shares, enhancing employee engagement and potentially impacting the bank’s market positioning positively.

RBI Blocks Share Acquisition in ESAF Small Finance Bank’s Promoter Scheme

ESAF Small Finance Bank Limited announced that it received communication from the Reserve Bank of India regarding a Scheme of Arrangement involving its promoter company and identified shareholders. The RBI has denied approval for Dia Vikas Capital Private Limited to acquire more than 5% of the bank’s paid-up share capital under the scheme. This decision is significant as it affects the promoter shareholding structure, prompting the promoter company’s board to assess implications and explore alternative actions to comply with RBI’s ownership guidelines.