Northern Arc Capital posts record Q1 profit of ₹114 crore, stock slips 4.9%

Northern Arc Capital Limited reported its highest-ever first-quarter profit of ₹114 crore in Q1FY27, a 41% increase year-on-year, while its stock price fell sharply on Tuesday. The Mumbai-based non-banking financial company's shares closed at ₹285.35 on the NSE, a 4.92% decrease from the previous close of ₹300.10, resulting in a market capitalisation of around ₹4,639 crore.

Net interest income grew 32% year-on-year to ₹394 crore, pre-provision operating profit rose 27% to ₹263 crore, return on assets improved by 29 basis points to 2.7%, and return on equity climbed 220 basis points to 11.5%. Lending assets under management expanded 26% year-on-year to ₹16,855 crore, with direct-to-customer lending, now accounting for 64% of total assets, growing at 51% year-on-year to ₹10,766 crore.

Asset quality improved, with gross NPA declining 20 basis points quarter-on-quarter to 1.0%, net NPA falling 15 basis points to 0.5%, and credit cost dropping 44 basis points year-on-year to 2.6%. The company received SEBI approvals for two debt funds during the quarter, and ICRA assigned it its highest-band Outstanding ESG Impact Rating of 81 out of 100.

MD & CEO Ashish Mehrotra expressed caution regarding geopolitical risks in West Asia and potential El Niño disruptions, but maintained confidence in sustaining growth momentum. Despite a 23.27% gain over the past year, the stock remains below its 52-week high of ₹334, which was reached on July 13, 2026.