Northern Arc Capital Limited has submitted to the Exchange, the financial results for the period ended Jun 30, 2025.
NORTHARC · price
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On the reaction day the stock moved 3.7 pts less than Nifty Microcap 250 and 3.4 pts less than its Non Banking Financial Company (NBFC) peers, over the same two closes: a difference in percentage points, not a measure of what the filing did.
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Northern Arc Capital has announced its Q1FY26 results, with Pre-Provision Operating Profit (PPoP) rising 18% year-on-year to ₹207 crore. Profit after tax stood at ₹81 crore, compared to ₹38 crore in Q4FY25 and ₹93 crore in Q1FY25. Lending Assets Under Management (AUM) grew 12% YoY to ₹13,351 crore, while Net Interest Income rose 10% to ₹298 crore. Asset quality remained healthy with Gross NPA at 1.13% and Net NPA at 0.56%. Net worth grew 27% YoY to ₹3,532 crore, supported by a strong Capital Adequacy Ratio of 25.5% and a debt-equity ratio of 2.66. The company also recognized a remaining ₹1,206 lakh ECL impact during the quarter, following an RBI directive to exclude credit enhancements and FLDG agreements from ECL computation (total impact ₹8,041 lakh of which ₹6,835 lakh was booked in Q4FY25). IPO proceeds of ₹44,984.46 lakh have been fully utilized for onward lending.
Q1FY26 reflects a meaningful recovery from the Q4FY25 dip, with credit costs halving sequentially and operating leverage improving. Strong capital adequacy and stable asset quality position the NBFC well for growth, though the YoY PAT dip versus Q1FY25 (despite higher PPoP) is driven by elevated credit costs in the base quarter and the RBI-mandated ECL adjustment, which shareholders should monitor.