ARC Finance Limited reported a net profit of ₹16.70 lakh for the quarter ended June 30, 2026, marking a 27% increase from ₹13.17 lakh in the corresponding period of FY25. The Kolkata-based financial services company also saw its revenue from operations rise to ₹184.35 lakh, up from ₹81.69 lakh in Q1FY25, driven by higher interest income and gains from share sales.

The Board of Directors approved the unaudited standalone financial results on August 11, 2026, pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The results were reviewed by SSRV & Associates, the statutory auditors, who issued a limited review report confirming that the statement is free of material misstatement.

Financial Performance Highlights

Interest income, a key revenue stream for the lender, surged to ₹100.02 lakh in Q1FY27 from ₹30.27 lakh in Q1FY25. Additionally, income from the sale of shares contributed ₹84.33 lakh, compared to ₹51.40 lakh in the previous year’s quarter. Dividend income remained negligible at ₹0.00 lakh.

| Particulars | Q1FY27 (₹ Lakh) | Q1FY25 (₹ Lakh) | Change | | ---: | :--- | :--- | :--- | | Revenue From Operations | 184.35 | 81.69 | 126% | | Total Expenses | 161.78 | 63.89 | 153% | | Net Profit | 16.70 | 13.17 | 27% | | Earnings Per Share (Basic) | ₹0.002 | ₹0.003 | -33% |

Total expenses rose sharply to ₹161.78 lakh from ₹63.89 lakh in Q1FY25. This increase was primarily due to changes in inventories of stock-in-trade, which stood at ₹94.73 lakh compared to a negative ₹291.52 lakh in the prior year. Employee benefits expense increased slightly to ₹6.50 lakh from ₹5.19 lakh, while finance costs decreased to ₹0.70 lakh from ₹1.43 lakh.

What the Numbers Show

The divergence between revenue growth and expense expansion warrants attention. While top-line revenue more than doubled year-on-year, total expenses grew at a faster pace (153% vs 126%). This dynamic compressed the operating leverage, resulting in a lower net profit growth rate relative to revenue. The significant variance in inventory changes suggests volatility in trading activities or stock management between periods, impacting the bottom line disproportionately compared to core interest income generation.

Arc Finance reported a net profit of ₹72.47 lakh for the financial year ended March 31, 2026, a significant decline from ₹331.25 lakh in the previous year. Total revenue from operations for FY26 rose to ₹2,808.64 lakh from ₹2,329.61 lakh in FY25, driven by higher interest income and share sales. However, total expenses surged to ₹2,710.71 lakh from ₹1,787.30 lakh in the prior year, primarily due to increased purchases of stock-in-trade and other business-related expenses, which impacted the bottom line.

Financial Performance

The company's total income for FY26 stood at ₹2,808.64 lakh. Interest income increased to ₹610.82 lakh from ₹253.76 lakh, while income from the sale of shares rose to ₹2,195.06 lakh compared to ₹2,075.61 lakh in FY25. Despite the revenue growth, a sharp rise in expenses, including purchases of stock-in-trade amounting to ₹2,168.11 lakh, compressed profitability.

Quarterly Results

For the quarter ended March 31, 2026, the company recorded a net profit of ₹47.80 lakh, a sharp drop from ₹337.95 lakh in the corresponding quarter of the previous year. Total revenue from operations for the quarter fell to ₹564.17 lakh from ₹1,236.59 lakh in the same quarter of the prior year. This decline was attributed to reduced income from the sale of shares, which fell to ₹139.49 lakh from ₹1,162.72 lakh.

Board Approvals

The Board of Directors, in its meeting held on May 29, 2026, approved the audited financial results for the quarter and year ended March 31, 2026. Additionally, the board approved the re-appointment of Mr. Akhil Agarwal, Practising Company Secretary, as Secretarial Auditor for FY 2026-27. The firm O. P. Khajanchi, Chartered Accountants, was also re-appointed as the Internal Auditor for the financial year 2026-27.

Auditor's Report

The statutory auditors, SSRV & Associates, issued an unmodified opinion on the standalone annual financial results. The auditors confirmed that the results give a true and fair view of the company's financial performance for the year ended March 31, 2026, in conformity with the recognition and measurement principles laid down in the applicable accounting standards.