AUM
₹16,594 Cr
+22% YoY
Assets under management grew to ₹16,594 crore, driven by direct-to-customer segment.
NORTHERNARCCAPITAL
Financial Services
24 Apr 2026
Northern ARC Capital Ltd — Q4 FY26
Northern ARC Capital delivered a strong Q4 FY26 with PAT of ₹133 crore (up 32% QoQ) and full-year PAT of ₹406 crore (+33% YoY), driven by AUM growth of 22% YoY to ₹16,594 crore and NIM expansion of 25bps to 9.4%.
✓ Verified against BSE filing
2-Min Summary
✦ AI-Generated from Full Transcript
Northern ARC Capital delivered a strong Q4 FY26 with PAT of ₹133 crore (up 32% QoQ) and full-year PAT of ₹406 crore (+33% YoY), driven by AUM growth of 22% YoY to ₹16,594 crore and NIM expansion of 25bps to 9.4%. The direct-to-customer segment now constitutes 59% of AUM, with MSME finance growing 43% YoY and consumer finance maintaining risk-adjusted yields of ~15%. Credit costs improved to 2.2% in Q4 (full year 2.8%), aided by RBI's FLG clarity and better collection efficiency. Management guided for AUM growth of 22-25% in FY27 and ROA of 3%+, with ROE targeting mid-to-late teens over 8-10 quarters. Key risk: geopolitical tensions in West Asia could impact MSME portfolio segments (currently <2% exposure).
Key Numbers
Direct-to-Customer AUM Share
59%
+40pp vs FY21
Direct-to-customer share increased from 19% in FY21 to 59% in FY26, boosting NIM.
MSME AUM Growth
₹3,691 Cr
+43% YoY
MSME portfolio grew 43% YoY, supported by branch expansion and improved collection efficiency.
Collection Efficiency (MSME x-bucket)
99.4%
+160bps vs Sep'25
MSME collection efficiency improved from 97.8% in Sep'25 to 99.4% in Mar'26.
Management Guidance
AUM growth of 22-25% in FY27
Management expects to grow AUM at about 3x GDP, implying 22-25% growth, barring major macro shocks.
Management guidance growthROA target of 3%+ and ROE mid-to-late teens in 8-10 quarters
Targeting return on assets above 3% and return on equity of 15-18% over the next 8-10 quarters.
Management guidance marginsCredit cost guidance of 2.7-2.8% for FY27
Credit cost expected to remain in the range of 2.7-2.8% for FY27, in line with FY26 levels.
Management guidance marginsCost of funds to hold at 8.5-8.6%
Management expects to maintain cost of funds at 8.5-8.6% as interest rates have bottomed out.
Management guidance otherKey Risks
Geopolitical tensions in West Asia
Management flagged potential impact on MSME portfolio from West Asia conflict, though current exposure is <2%.
medium · management_commentaryInterest rate reversal risk
Rising rates could increase cost of funds; management has shifted to fixed-rate borrowings to mitigate.
medium · analyst_questionConcentration in consumer finance partners
Analyst raised concern about partner concentration; management noted 28 partners but did not disclose top share.
low · analyst_questionNotable Quotes
Our sense is that we should be able to grow a business at about three times of GDP. So look at anywhere between 22 to 25%.
We will be able to hold on to the numbers that we have demonstrated this year so maybe we will not see any further reduction but I think 8.5 to 8.6% is something we'll be able to hold.
Our objective is to get to three plus return on assets and like we said over the next 8 to 10 quarters get to mid-teens and late teens ROE.
Frequently Asked Questions
What was Northern ARC Capital's revenue in Q4 FY26?
Northern ARC Capital reported revenue of — in Q4 FY26, representing a — change compared to the same quarter last year.
What guidance did Northern ARC Capital management give for FY27?
AUM growth of 22-25% in FY27: Management expects to grow AUM at about 3x GDP, implying 22-25% growth, barring major macro shocks. ROA target of 3%+ and ROE mid-to-late teens in 8-10 quarters: Targeting return on assets above 3% and return on equity of 15-18% over the next 8-10 quarters. Credit cost guidance of 2.7-2.8% for FY27: Credit cost expected to remain in the range of 2.7-2.8% for FY27, in line with FY26 levels. Cost of funds to hold at 8.5-8.6%: Management expects to maintain cost of funds at 8.5-8.6% as interest rates have bottomed out.
What are the key risks for Northern ARC Capital in FY27?
Key risks include Geopolitical tensions in West Asia — Management flagged potential impact on MSME portfolio from West Asia conflict, though current exposure is <2%.; Interest rate reversal risk — Rising rates could increase cost of funds; management has shifted to fixed-rate borrowings to mitigate.; Concentration in consumer finance partners — Analyst raised concern about partner concentration; management noted 28 partners but did not disclose top share..
Did Northern ARC Capital meet its previous quarter's guidance?
Scorecard data is being built as historical quarters are processed.
Where can I read the full Northern ARC Capital Q4 FY26 concall transcript?
The full earnings conference call transcript or source release is available on the linked source material. This page provides an AI-generated summary verified against official BSE/NSE filings.