Breakout Stock Below Rs 100: Cup-and-Handle Pattern Breakout Seen; 3 Key Triggers to Watch

The Indian equity benchmark indices were trading lower by over half a per cent in Monday afternoon trade, with most sectors in the red. Nifty Pharma and Nifty FMCG were among the few pockets showing resilience. In this weak market setup, Equitas Small Finance Bank stood out, with the stock gaining around 2.5 per cent on Monday, June 08, 2026.

Breakout Stock: Equitas Small Finance Bank Sees Cup and Handle Breakout

With this move, Equitas Small Finance Bank hit a fresh 52-week high and registered a breakout from an almost five-month-long cup-and-handle-like pattern. The stock is trading above its key moving averages, and the moving averages are placed in the desired sequence, indicating strength in the trend. The Bollinger Band has also started expanding, suggesting improving momentum. The 14-period daily RSI has moved above its previous swing high and is sustaining above the 60 mark. Meanwhile, the daily MACD is pointing upward and remains above its nine-period average, supporting the positive bias. With the stock still trading under Rs 100, it remains worth tracking after this technical breakout.

While the chart structure has turned encouraging, the move is also backed by improving fundamentals.

Here are the three key triggers that make Equitas Small Finance Bank a stock to watch

Equitas Small Finance Bank Q4FY26 Performance: Asset Quality Improves, Disbursements Hit Record High

Equitas Small Finance Bank delivered a strong Q4FY26 performance, supported by healthy disbursement growth, better collection efficiency and a sharp recovery in profitability. The bank reported its highest-ever quarterly disbursements of Rs 7,347 crore, up 72 per cent YoY and 12 per cent QoQ. Gross advances grew 22 per cent YoY and 7 per cent QoQ to Rs 46,165 crore. Excluding the Direct Assignment book, advances grew 19 per cent YoY, broadly meeting the bank’s mid-teen FY26 growth guidance. The non-MFI book also remained healthy, growing 21 per cent YoY.

Profitability saw a strong rebound during the quarter. Net income increased 18 per cent YoY and 9 per cent QoQ, while PAT jumped to Rs 213 crore from Rs 42 crore in Q4FY25 and Rs 90 crore in Q3FY26. Asset quality improved as well, with GNPA declining to 2.49 per cent and NNPA falling to 0.68 per cent. Provision coverage strengthened to 73.03 per cent, while credit cost eased to 1.11 per cent from 1.88 per cent in Q3FY26. The bank also outperformed its Q4FY26 guidance on profitability, as it had guided for an exit RoA of around 1 per cent, while the actual RoA came in at 1.46 per cent.

NIM Movement Remains a Key Positive

The NIM movement was one of the major highlights of the quarter. NIM expanded sharply to 7.29 per cent in Q4FY26 from 6.72 per cent in Q3FY26. This improvement was led by higher interest income from advances and lower interest expenses, as the cost of funds declined from 7.13 per cent in Q3FY26 to 6.94 per cent in Q4FY26.

The overall yield on gross advances also improved by 7 bps QoQ to 15.51 per cent, helped by a higher MFI mix. At the same time, yield excluding the Direct Assignment book remained stable, which indicates that the core lending book has held up well.

FY27 Guidance by Equitas Small Finance Bank

For FY27, Equitas Small Finance Bank has guided for over 20 per cent growth in overall advances, driven by growth across products. The bank expects MFI advances to remain around 10 per cent of the total advances book. It also expects the cost-to-income ratio to moderate further in H2FY27, supported by operating leverage as advances grow. However, Q1FY27 may remain elevated due to annual increments.

Credit costs may rise marginally from the seasonally low Q4FY26 base, but the bank expects them to stabilise during FY27. Key triggers for the stock include sustained improvement in MFI collections, continued growth in secured and non-MFI products, better operating leverage, movement in deposit costs after SA and TD rate revisions, and the bank’s ability to move towards a full-year RoA of around 1.2 per cent and an exit RoA of about 1.5 per cent by Q4FY27.

Disclaimer: The article is for informational purposes only and not investment advice.