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As on 30-Jul-2025  15:24

Northern Arc Capital drops after Q1 PAT slumps 13% YoY to Rs 81 cr
Profit before tax (PBT) fell 15.46% YoY to Rs 1043.65 crore in Q1 FY25.

Net Interest Income (NII) grew by 10% YoY to Rs 298 crore in Q1FY26. Lending asset under management (AUM) jumped 12% YoY to Rs 13,351 crore as on June 30, 2025.

Credit cost was Rs 102 crore for Q1FY26, registering the growth of 99% compared to Rs 51 crore in Q1FY25.

As on 30th June 2025, gross NPA ratio was 1.13% while Net NPA ratio was 0.56% and provisioning coverage ratio on stage III assets was 50%.

Capital adequacy ratio stood at 25.5% as on 30th June 2025.

MD & CEO Ashish Mehrotra said, 'FY25 was a challenging year for the lending industry, but we enter FY26 with cautious optimism. Early signs of recovery are emerging, driven by strengthening macro fundamentals in the form of rising consumption, increased corporate capex, and a favourable monsoon outlook, alongside a regulatory push toward improved liquidity through rate cuts and a gradually normalizing credit environment, especially in the MFI segment outside Karnataka.

At Northern Arc, our fee-based businesses continue to gain momentum, with core fee income growing 24% YoY against a 12% balance sheet expansion reflecting our strategic focus on building a solutions-led credit ecosystem. Excluding rural finance, where exposure remains calibrated, AUM grew 20% YoY. In rural finance, asset quality is stabilizing, with 0+ PAR reverting to March 2024 levels at 0.5%. We expect growth momentum to strengthen in the second half, supported by an improving credit cycle and liquidity.'

Northern Arc Capital is a leading diversified non-banking financial company (NBFCs), offering a comprehensive suite of solutions including lending, placements, and fund investments in key sectors like MSME Financing, MFI, consumer financing, vehicle financing, affordable housing financing, and agricultural supply chain finance.

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