Northern Arc Capital Posts Highest First-Quarter Results with INR 114 Cr Profit; Lending AUM Reaches 26% Growth

Northern Arc Capital Posts Highest First-Quarter Results with INR 114 Cr Profit; Lending AUM Reaches 26% Growth​

Northern Arc Capital Limited (NACL) announced its unaudited financial results for the first quarter of fiscal year 2027, ending June 30, 2026. The company reported a significant rise in profitability, noting that Profit after tax (PAT) grew by 41% year-on-year (YoY) to INR 114 crore.

The financial performance highlights included Pre-provision operating profit (PPoP), which increased by 27% YoY to INR 263 crore for Q1FY27. Net Interest Income also rose by 32% YoY, reaching INR 394 crore. NACL's operational efficiency saw the Opex ratio remain flat at 3.6%, while the credit cost decreased by 44 basis points (bps) YoY to 2.6%.

The company reported a robust increase in its lending capacity and asset base. Lending Assets Under Management (AUM) grew by 26% YoY, reaching INR 16,855 crore as of June 30, 2026. The direct lending (D2C) AUM specifically increased by 51% YoY, constituting 64% of the total D2C lending in AUM. Gross Transaction Volume for Q1FY27 was INR 8,595 crore.

Asset Quality and Capital Adequacy​

Northern Arc demonstrated strong asset quality management during the quarter. The gross NPA ratio improved by 20 bps Quarter-on-Quarter (QoQ) to 1.0%, while the net NPA ratio improved by 15 bps QoQ to 0.5%. The provisioning coverage ratio on Stage III assets stood at 48.5% as of June 30, 2026.

As of June 30, 2026, the company maintained a healthy Capital Adequacy Ratio (CRAR) of 22.7%. Net worth also saw an increase of 15% YoY, reaching INR 4,056 crore.

The key analytical ratios for the quarter ended June 30, 2026, are summarized below:

Operational and Financial Highlights​

The company's performance across various financial metrics shows a focus on quality growth and prudent risk management, which aligns with the strategy of building a diversified retail lending portfolio.

Key aspects noted include:

• Income: Net Interest Income was INR 394 Cr (up 32% YoY). Fee and Other income recorded at INR 22 crore in Q1FY27.
• Credit Risk: Credit cost stood at 2.6%, a reduction of 44 bps YoY.
• ESG Rating: Northern Arc achieved the 'Outstanding' ESG Impact Rating (Score of 81/100) from ICRA, underscoring its commitment to responsible and sustainable growth.

Commenting on the Q1FY27 results, Ashish Mehrotra, MD & CEO of Northern Arc Capital Limited, stated that the quarter marked a strong start, continuing execution with discipline. He noted the achievement of the INR 10,000 crore milestone in Direct lending (D2C) portfolio during the quarter.

He further stated: "While we remain watchful of evolving external risks, including geopolitical developments and potential impact of El Niño conditions on the monsoon, we believe Northern Arc is well positioned to navigate these uncertainties."

Consolidated Financial Snapshot​

The results for the Group also showed positive trends in various segments (as per Annexure B).

NORTHARC Stock Price Movement​

Shares of Northern Arc Capital Limited slipped today, setting at ₹300.1 after the equity shed 0.47% in the post-market trading session. The stock generated a robustly traded volume of 1.18 million shares throughout the day.