Tata Capital vs South Indian Bank Q4 FY26

Tata Capital delivered a strong Q4 FY26, with PAT (ex-motor finance) surging 51% YoY to ₹1,459 crore, driven by lower credit costs (0.8%) and improved asset quality (net NPA 0.5%). AUM grew 28% YoY (ex-motor) to ₹2.52 lakh crore, led by housing finance (29% YoY) and retail momentum. Disbursements crossed ₹50,000 crore for the first time. Management guided for FY27 AUM growth of 23-25% and expects cost of funds to decline further. The motor finance business turned profitable (₹43 crore PAT) and is expected to resume growth in H1 FY27. Key risks include geopolitical tensions (West Asia conflict) impacting MSME and CV segments, though management noted no material stress yet. The company remains on track to achieve its FY28 ROA target of 2.5-2.7%.

Guidance read

FY27 AUM growth of 23-25%: Management expects overall AUM growth in the range of 23-25% for FY27, supported by retail and housing momentum. FY28 ROA target of 2.5-2.7%: Reiterated target of achieving ROA between 2.5% and 2.7% by FY28, driven by margin expansion and cost efficiencies. Motor finance business to resume growth in H1 FY27: Disbursements grew 32% sequentially in Q4; management expects AUM growth to resume from H1 FY27. Cost of funds expected lower in FY27 vs FY26: Management expects overall cost of funds in FY27 to be lower than FY26 due to repricing of liabilities.

Risk read

Key risks include Geopolitical tensions (West Asia conflict) — Ongoing conflict could impact inflation, energy prices, and global financial conditions, potentially affecting MSME and CV segments.; El Nino impact on rural demand — Evolving El Nino conditions remain a watch point for potential impact on food inflation and rural demand, which could affect asset quality.; Tightening liquidity and rising incremental borrowing costs — March saw hardening of rates due to liquidity tightness; while short-term costs eased in April, long-term costs remain elevated.; Potential stress in MSME sub-segments — Management has tightened norms in certain MSME sub-segments (e.g., travel-related) due to secondary impacts from geopolitical developments..

Promise ledger

Scorecard data is being built as historical quarters are processed.

South Indian Bank reported a strong Q4 FY26 with net profit of ₹408 crore (up 19% YoY) and full-year PAT of ₹1,455 crore (up 12% YoY). Asset quality improved sharply: gross NPA fell 177 bps YoY to 1.43% and net NPA to 0.29%. Slippage ratio was a record low 15 bps for the quarter. Growth was driven by a 46% surge in gold loans (now ₹24,729 crore) and a shift toward retail/MSME. NIM improved to 2.95% on better mix. Management guided for 15-16% loan growth in FY27 and expects NIM to widen further. Key risk: credit costs may rise from current unsustainably low levels (3 bps this quarter) due to geopolitical uncertainties.

Guidance read

Loan growth target of 15-16% for FY27: Management aims to grow advances at 15-16% in FY27, matching or exceeding industry growth. NIM to continue widening: NIM improved 9 bps QoQ to 2.95% in Q4; management expects further improvement from asset mix shift and deposit repricing. Positive operating leverage for third consecutive year: Management targets positive operating leverage in FY27, with revenue growth outpacing expense growth. Corporate book to reduce to ~33% of total advances: Medium-term target to bring corporate exposure down from 38% to about one-third of the loan book.

Risk read

Key risks include Credit cost normalization — Credit cost was only 3 bps in Q4, unsustainably low. Management expects it to trend upward due to geopolitical stresses.; Gold price volatility risk — A sharp drop in gold prices could erode collateral margins on the large gold loan book (₹24,729 crore). Management uses VaR and margin calls but extreme moves remain a risk.; Succession uncertainty — MD & CEO's term ends Sep 30, 2026. Board search is ongoing; any delay or unfavorable outcome could impact strategic continuity.; ECL transition impact — Transition to expected credit loss (ECL) norms may require higher provisions, though management expects no material impact..

Promise ledger

Scorecard data is being built as historical quarters are processed.