Northern Arc Capital Posts Record PAT of ₹101 Crore, AUM Surges Past ₹15,000 Crore

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AuthorIshaan Verma|Published at:
Northern Arc Capital Posts Record PAT of ₹101 Crore, AUM Surges Past ₹15,000 Crore
Overview

Northern Arc Capital reported a record quarterly Profit After Tax (PAT) of ₹101 crore in Q3FY26, a 33% year-on-year increase. Lending Assets Under Management (AUM) surged 23% YoY to ₹15,121 crore. Net Interest Income (NII) grew 39% YoY to ₹371 crore, driven by strong D2C lending momentum and fee income growth. Management expressed optimism for sustained AUM growth.

📉 The Financial Deep Dive

Northern Arc Capital Limited has announced a stellar performance for the third quarter and nine months ended December 31, 2025, marking its highest-ever quarterly Profit After Tax (PAT).

The Numbers:

  • PAT: ₹101 crore in Q3FY26, a significant 33% increase year-on-year (YoY) and a 10% rise quarter-on-quarter (QoQ). This is a record quarterly PAT for the company.
  • Lending AUM: Surpassed ₹15,000 crore, reaching ₹15,121 crore as of December 31, 2025. This represents a 23% YoY growth and 7% QoQ growth.
  • Net Interest Income (NII): Grew by 39% YoY and 15% QoQ to ₹371 crore in Q3FY26.
  • Fee & Other Income: Showed robust growth of 49% YoY and 50% QoQ, reaching ₹32 crore.
  • Profit Before Provisioning, Depreciation, and Amortisation (PPoP): Increased by 51% YoY and 24% QoQ to ₹265 crore.
  • Credit Cost: Stood at ₹130 crore for the quarter.
  • Net Worth: Grew 11% YoY to ₹3,788 crore.

The Quality:

Northern Arc Capital's performance highlights strong operational execution and strategic focus. The AUM growth was bolstered by an increasing share of Direct to Customer (D2C) lending, which now constitutes 56% of the total AUM, contributing to a more diversified and granular loan book. The Performing Credit Fund AUM also saw a healthy 15% YoY growth to ₹3,207 crore. The substantial increase in Fee & Other Income indicates successful diversification of revenue streams beyond traditional lending margins. The PPoP growth outpaced NII growth, suggesting effective cost management or operating leverage.

Asset quality remains a key focus, with Gross NPA at 1.36% and Net NPA at 0.69%. The Provisioning Coverage Ratio (PCR) on Stage III assets at 49% indicates a prudent approach to managing potential risks.

A strong Capital Adequacy Ratio (CAR) of 23.1% underscores the company's financial resilience and ability to support future growth while adhering to regulatory norms.

The Grill:

Management expressed a positive outlook, citing strong momentum in consumption and expecting sustained AUM growth through the financial year. They reiterated their mission to facilitate capital flow and reduce barriers between investors and borrowers. The company also stated that the implementation of new Labour Codes is not expected to have a material impact on employee costs.

🚩 Risks & Outlook

While the company projects continued AUM growth, potential risks include the evolving regulatory landscape for NBFCs, credit cycle shifts, and competitive pressures within the lending sector. Investors will be watching the continued expansion of the D2C segment and the management's ability to maintain asset quality amidst growth. The outlook remains positive, with management focused on enabling efficient capital deployment and strategic expansion.

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