Tata Capital Q1 profit jumps 56% on lower credit costs, higher lending income; asset quality improves

Tata Capital reported a strong performance for the June quarter, with consolidated profit rising more than 56% year-on-year, driven by robust growth in lending income, lower impairment provisions and improving asset quality.

The Tata Group's financial services arm posted a consolidated profit after tax of ₹1,628 crore for the first quarter of FY27, compared with ₹1,041 crore a year earlier. Total revenue from operations increased 15.1% to ₹8,822 crore, while profit before tax surged 56.2% to ₹2,159 crore. Profit attributable to the owners of the company stood at ₹1,547 crore during the quarter.

The strong earnings were aided by healthy growth in interest income, which rose to ₹7,941 crore from ₹6,932 crore in the corresponding quarter last year. At the same time, impairment on financial instruments declined to ₹678 crore from ₹909 crore, helping lift profitability despite a rise in finance costs.

Asset quality strengthens

The company's asset quality improved further during the quarter. Gross non-performing assets (GNPA) declined to 2.45% as of June 30, 2026, from 2.62% a year earlier, while net non-performing assets (NNPA) improved to 1.07% from 1.24%. Provision coverage ratio increased to 56.99% from 53.44%, and the capital adequacy ratio strengthened to 18.46%, compared with 16.49% a year ago.

The improvement in asset quality comes even as Tata Capital continued to expand its lending franchise across retail and corporate segments.

Board reiterates strategic growth plans

The company also reiterated its proposed acquisition of Yogakshemam Loans Ltd (Yogloans), an RBI-registered gold loan-focused NBFC. Tata Capital had earlier signed an agreement to acquire around 88.6% of the company's equity, subject to regulatory approvals, as part of its strategy to strengthen its secured lending portfolio.

Separately, the board re-appointed Sarita Kamath as the company's chief compliance officer for a further three-year term with effect from October 1, 2026.

The company also said there was no deviation in the utilisation of proceeds raised through its initial public offering, with the funds continuing to be deployed towards augmenting its Tier-I capital base and supporting future lending growth.

Shares of Tata Capital ended 1.3% higher at ₹355.10 apiece on the NSE on Tuesday. The stock has risen more than 4% year-to-date, roughly matching the gains in the Nifty Next 50 index.