Tata Capital’s net profit for the quarter ended March stood at Rs 1,502 crore, up 16.4% on quarter. This includes the acquisition of Tata Motors Finance which was completed on May 8, hence year-on year-figures weren’t comparable. Excluding the motor finance businesses, the company reported a profit after tax of Rs 1,459 crore, up 51% year-on-year. The company has recommended a final dividend of ₹0.57 per equity share of face value ₹10 each.
The improvement in the bottom line was largely due to decline in credit costs and improvement in the asset quality. The assets under management (AUM) rose 6.4% on quarter to Rs 2.77 lakh crore as on March 31.
Housing, retail and the small and medium enterprise (SME) segments would drive growth going ahead, Rajiv Sabharwal, MD & CEO of the company said in the post earnings media call. Excluding the motor finance business, AUM stood at Rs 2.51 lakh crore at the end of FY26, up 28% year-on-year.
The net interest income for the reporting quarter stood at Rs 3,477 crore up 5% on a quarter-on-quarter basis. However, excluding the motor finance business the net interest income stood at Rs 3,127 crore up 28% on year.
The return on assets (ROA) stood at 2.3% as against 2.1% a quarter ago, and the return on equity (ROE) stood at 13.9% as against 13.1% a quarter ago. Credit cost for Jan-Mar stood at 0.9% as against 1.2% a quarter ago. The gross NPA ratio improved to 2.0% as on March 31 from 2.2% as on December end and the net NPA ratio stood at 0.9% as compared to 1.0% a quarter ago.
The company also plans to increase the proportion of high-yielding businesses such as affordable housing, unsecured retail and select SME loans as it works towards its FY28 growth targets.
“Our guidance towards FY28 is that we will grow our overall book by 23–25%. If we are growing our high-yielding businesses slightly more, it will be more than 25% for the average to be between 23–25%,” Sabharwal said during the earnings call.
The lender expects affordable housing to grow faster than the broader housing portfolio, which expanded nearly 29–30% in FY26. Retail secured and unsecured segments are also seen maintaining strong momentum. The unsecured book, currently around 10% of assets under management (AUM), is expected to inch up in the coming year as credit costs moderate. Retail and SME together account for 86% of the company’s AUM, reflecting its focus on granular and diversified lending, he said.
The motor finance business, which was recalibrated post integration with Tata Motors Finance, achieved break-even in Q3FY26 and turned profitable in Q4. Growth in that segment is expected to resume from the first half of FY27 after a conscious focus on portfolio quality and profitability metrics.
While acknowledging global uncertainties, Sabharwal said the company remains diversified and largely secured in its approach, adding that it does not expect any significant impact on its portfolio at this stage.