Tata Capital Q2 profit rises 33% to ₹1,128 cr on strong loan growth

Strong loan growth, higher fee income and steady asset quality boost Tata Capital's quarterly performance; firm expects 18-20% AUM growth in FY26

Tata Capital Ltd’s (TCHFL) consolidated net profit rose 33 per cent year-on-year (YoY) to Rs 1,128 crore in the second quarter ended September 2025 (Q2 FY26) on the back of improvement in net interest income (NII) and fee income.

 

The company’s NII was up 23 per cent YoY to Rs 2,637 crore, while fee income grew 59 per cent YoY to Rs 588 crore in Q2 FY26. Tata Capital’s shares closed 0.64 per cent higher at Rs 330.95 on the BSE.

 

Rajiv Sabharwal, managing director and chief executive officer of Tata Capital, said, “Q2 FY26 was a strong quarter marked by broad-based momentum. The profit after tax rose 33 per cent to Rs 1,128 crore, reflecting the strength of our diversified and well-managed portfolio.”

 

 

According to an analyst presentation, the company expects about 35 per cent growth in net profit in FY26 and over 30 per cent compound annual growth rate (CAGR) for the next three years.

 

Steady loan growth and strong outlook

 

Tata Capital’s assets under management (AUM), excluding the motor finance business, grew 22 per cent YoY to Rs 2.15 trillion at the end of September 2025. Including motor finance, the company expects AUM growth of 18–20 per cent for FY26 and a 23–25 per cent CAGR over the next three years.

 

Sabharwal said the recent reduction in goods and services tax (GST) rates is expected to boost consumption and create a supportive environment for higher growth in the second half of FY26.

 

Asset quality remains robust

 

The company’s gross stage three loans, or gross non-performing assets (NPAs), stood at 1.6 per cent as of September 30, 2025, while net stage three loans were at 0.6 per cent. The provision coverage ratio stood at 64 per cent.

 

“Credit quality remains robust across categories, resulting in a 30-basis point drop in annualised credit cost in Q2 FY26 over Q1 FY26,” Sabharwal added.

 

Loan loss provisions grew 62 per cent during the quarter. The company’s capital adequacy ratio was 17.3 per cent as of September 30, 2025, and 21.5 per cent including proceeds from its initial public offering (IPO).