Capital Trust Limited has announced its unaudited financial results for the third quarter of FY26, reporting a net loss of ₹243.11 lakhs compared to a profit of ₹5.88 lakhs in the corresponding quarter of the previous year. The company's board of directors approved these results at their meeting held on February 14, 2026.

Financial Performance Overview

The company's financial performance showed significant challenges during the quarter ended December 31, 2025. Total income declined substantially to ₹1,129.61 lakhs from ₹2,519.82 lakhs in the same quarter last year, representing a notable decrease in revenue generation.

Revenue Breakdown and Operational Challenges

The company's revenue from operations was impacted across multiple segments. Interest income decreased to ₹508.91 lakhs from ₹1,698.67 lakhs in the previous year quarter. Fees and commission income also declined significantly to ₹106.39 lakhs compared to ₹514.15 lakhs in Q3FY25.

Nine-Month Performance and Capital Raising

For the nine months ended December 31, 2025, the company reported a net loss of ₹2,863.80 lakhs compared to a profit of ₹102.50 lakhs in the corresponding period of the previous year. Total income for the nine-month period was ₹3,275.58 lakhs against ₹7,505.78 lakhs in the previous year.

The company successfully completed a Rights Issue of 1,70,09,702 equity shares at ₹14 per share, raising ₹2,381 lakhs. The issue opened on October 20, 2025, and closed on November 11, 2025, with shares listed on November 14, 2025.

Regulatory Impact and Business Strategy

Capital Trust reported an exceptional item of ₹91.47 lakhs due to the implementation of New Labour Codes effective November 21, 2025. This one-time impact resulted from increased gratuity liability due to changes in wage definitions. The company noted its cautious approach to disbursements due to collection challenges in the unsecured lending sector, focusing on developing its Gold Loan product platform.

Capital Trust Limited has received a rating downgrade from CARE Ratings, with its long-term bank facilities revised to BB from BB+ with a stable outlook. The revision reflects the non-banking financial company's weak profitability, deteriorating asset quality, and declining scale of operations in recent periods.

Rating Revision Details

CARE Ratings announced the downgrade on December 16, 2025, affecting the company's long-term bank facilities. The rating agency has also withdrawn its outstanding rating on the non-convertible debenture bearing ISIN number INE707C07064, as the corporation has repaid the bond in full.

Key Performance Challenges

Weak Profitability

The company's financial performance deteriorated significantly in H1 FY26, reporting a net loss of ₹2.60 crores compared to a profit of ₹0.10 crores in FY25. The decline was driven by lower interest income and reduced fee income from business correspondence activities.

Deteriorating Asset Quality

Asset quality has been under significant pressure, with gross NPA ratio rising sharply to 9.40% in September 2025 from 5.90% in FY25 and 1.40% in FY24. The company witnessed fresh NPA additions of ₹10.75 crores in H1 FY26 on an assets under management basis.

Capital Position and Business Developments

Despite the challenges, Capital Trust has taken steps to strengthen its capital position. The company's tangible net worth had declined to ₹0.20 crores as of September 30, 2025, with capital adequacy ratio at 10.00% against regulatory requirements of ₹10.00 crores and 15% respectively.

However, the company raised capital of ₹23.80 crores in November 2025 through a rights issue, with ₹13.81 crores from promoters and the remaining from public subscription. Post this capital infusion, the company's tangible net worth improved to ₹2.60 crores and capital adequacy ratio to 35.70%.

New Business Initiatives

Capital Trust has ventured into the secured lending segment by introducing gold loan products with tenures ranging from 6-12 months. In October 2025, the company achieved early traction with disbursements of ₹0.75 crores in the first month of operations.

The company also entered an agreement with Suryoday Small Finance Bank in October 2025 without first loss default guarantee requirement, which is expected to help improve business volumes gradually.

Operational Scale and Geographic Presence

The company's assets under management have been declining, standing at ₹123.85 crores as of September 30, 2025, compared to ₹725.00 crores as of March 31, 2019. Capital Trust operates across 10 states through 287 branches, serving 47,355 customers, with major presence in Bihar (35% of AUM), Uttar Pradesh (19%), and Odisha (12%).

Outlook and Rating Sensitivity

CARE Ratings maintains a stable outlook, expecting that recent capital raise and management's decision to move towards secured lending will help improve scale and maintain financial stability. Positive rating actions could result from sizeable scaling up of operations while improving asset quality and profitability, while continued deterioration in asset quality or liquidity profile could lead to further downgrades.