Northern Arc Capital delivered exceptional Q3FY26 results, achieving its highest-ever quarterly profit of ₹101.7 crore, representing a 41% year-on-year increase from ₹72.18 crore in the same period last year. According to reports from The Hindu BusinessLine, the company's profit after tax surged 33% year-on-year and 10% sequentially, demonstrating strong operational momentum driven by robust lending growth, higher interest income and improved placement volumes.
The company crossed a significant operational milestone by lending assets under management (AUM) reaching ₹15,121 crore, marking a 23% year-on-year and 7% quarter-on-quarter increase. As reported by The Hindu BusinessLine, this growth was primarily driven by expansion in the direct-to-customer (D2C) lending portfolio, which now accounts for 56% of total AUM. This shift toward direct customer relationships has been a key growth driver for the company, reflecting a more diversified and granular portfolio structure.
Net interest income demonstrated robust growth of 39% year-on-year and 15% quarter-on-quarter to ₹371 crore during the quarter, according to The Hindu BusinessLine reports. The company maintained strong asset quality metrics with gross NPA at 1.36% and net NPA at 0.69% as of December 31, 2025. Fee and other income rose even faster, up 49% year-on-year and 50% sequentially to ₹32 crore, indicating diversified revenue streams beyond core lending operations. Provisioning coverage on Stage III assets stood at 49%, while the capital adequacy ratio remained healthy at 23.1%.
MD & CEO Ashish Mehrotra highlighted the achievement of two key milestones - crossing ₹15,000 crore in lending AUM and recording the highest quarterly PAT in company history. As reported by The Hindu BusinessLine, Mehrotra attributed the strong performance to consumption demand strengthening following GST rate cuts in September 2025 and the Reserve Bank of India's repo rate reduction in December 2025, which together supported the strong AUM growth. He expects this positive momentum to continue into the final quarter of the financial year, indicating confidence in sustained growth prospects.
Shares of Northern Arc Capital ended higher on Friday, January 30, gaining 3.01% to close at ₹272.01 on the NSE, according to CNBC TV18. The positive market reaction reflects investor confidence in the company's record quarterly performance and strong operational metrics, with the stock price movement indicating market approval of the company's growth trajectory and financial results. The 41% profit growth and strong AUM expansion have reinforced investor confidence in the company's strategic positioning and execution capabilities.
