According to The Hindu BusinessLine, Northern Arc Capital delivered its highest-ever first-quarter profit of ₹114 crore, with consolidated net profit rising 41% year-on-year compared to the previous year. However, shares of the Mumbai-based NBFC closed at ₹285.35 on Tuesday, down 4.92% from the previous close of ₹300.10, giving it a market capitalisation of approximately ₹4,639 crore. The company's total revenue from operations stood at ₹76,749.88 lakh for the quarter, compared to ₹59,058.40 lakh in Q1FY25. Net Interest Income (NII) surged 32% to ₹394 crore from ₹298 crore in the prior year period, while pre-provision operating profit (PPoP) increased 27% year-on-year to ₹263 crore. Basic earnings per share stood at ₹7.54, compared to ₹6.42 in the previous year, with return on assets improving by 29 basis points to 2.7% and return on equity rising by 220 basis points to 11.5%.
As reported by The Hindu BusinessLine, the company's lending assets under management (AUM) grew 26% year-on-year to ₹16,855 crore as of June 30, 2026, reflecting steady demand for formal credit across retail customers and MSMEs. Direct-to-customer lending, which now accounts for 64% of total AUM, grew faster at 51% year-on-year to ₹10,766 crore, crossing the ₹10,000 crore milestone during the quarter. The company originated loans worth ₹8,595 crore during the quarter, demonstrating continued momentum in credit demand. Total expenses rose to ₹60,742.71 lakh from ₹45,471.78 lakh, primarily due to higher finance costs and impairment provisions. Capital adequacy remained strong at 22.7%, well above regulatory requirements, with net worth increasing 15% to ₹4,056 crore. The company maintained a debt-equity ratio of 3.05 and total debts to total assets ratio of 0.72.
According to The Hindu BusinessLine, asset quality showed sequential improvement with the gross non-performing asset (GNPA) ratio declining 20 basis points quarter-on-quarter to 1%, while the net NPA ratio improved 15 basis points to 0.5%. Credit cost dropped 44 basis points year-on-year to 2.6%, which falls within the company's guided range of 2.7–2.8%. The provisioning coverage ratio on Stage III assets stood at 48.5%, and the capital adequacy ratio stood at 22.7% at the end of June. The company transferred stressed loans worth ₹3,823.16 lakh to Asset Reconstruction Companies (ARCs) during the quarter and recognized an additional Expected Credit Loss (ECL) provision of ₹6,584 lakh to account for geopolitical uncertainties. Management maintained a prudent approach to risk, recognizing this overlay provision that was reassessed based on evolving portfolio conditions.
According to The Hindu BusinessLine, Northern Arc Capital now works with 57 digital partners alongside its branch network to offer loans to retail customers, MSMEs and rural borrowers while also supporting other lending institutions. The company has facilitated nearly ₹2.5 lakh crore in financing, reaching more than 140 million people. Across lending and fund management, its platform now manages nearly ₹19,843 crore in assets. Managing Director and CEO Ashish Mehrotra flagged watchfulness around geopolitical risks in West Asia and potential El Niño disruptions, while expressing confidence in sustaining growth momentum. The company received SEBI approvals for two new debt funds during the quarter, expanding its asset management capabilities. ICRA assigned Northern Arc its highest-band 'Outstanding' ESG Impact Rating with a score of 81 out of 100, reflecting strong environmental, social, and governance practices.
