Northern Arc Capital Limited has submitted to the Exchange, the financial results for the period ended March 31, 2025.
NORTHARC · price
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Northern Arc Capital, a Chennai-based NBFC, reported its audited standalone and consolidated results for FY25. Total income from operations grew about 25% year-on-year to Rs. 2,28,411 lakhs (from Rs. 1,82,856 lakhs), while full-year profit after tax rose roughly 22% to Rs. 34,261 lakhs (from Rs. 28,017 lakhs). However, Q4 standalone PAT fell sharply to Rs. 4,674 lakhs from Rs. 8,194 lakhs a year earlier. The company remains well capitalised with a CRAR of 24.72%, debt-equity ratio improving to 2.87x from 4.07x, and gross Stage-3 assets of just 0.99%. Statutory auditor Walker Chandiok & Co LLP issued an unmodified opinion, but flagged an Emphasis of Matter around a recent RBI directive (dated May 16, 2025) that will require the company to stop recognising credit enhancements under First Loss Default Guarantee (FLDG) arrangements in its ECL calculations, which will likely lead to additional loan-loss provisions by June 30, 2025. The Board also approved raising up to Rs. 5,000 crore via non-convertible debentures on a private placement basis and appointed M/s. Alagar & Associates as the new secretarial auditor for a five-year term.
Strong full-year growth in revenue and profit, along with improved leverage and capital adequacy, is positive for shareholders. However, the RBI's FLDG-related direction and the significant drop in Q4 profit warrant caution, as additional provisioning in Q1FY26 could pressure near-term earnings. The Rs. 5,000 crore NCD plan signals continued business expansion but will also increase debt levels.