Northern Arc Capital Reports 13% QoQ Growth in Q2FY26 PAT, Appoints New Directors

Northern Arc Capital Limited , a leading diversified Non-Banking Financial Company (NBFC), has announced its financial results for the second quarter ended September 30, 2025, showcasing steady growth and strategic appointments to its board.

Financial Highlights

Profit After Tax (PAT): Grew by 13% quarter-on-quarter to INR 92.00 crore in Q2FY26.
Assets Under Management (AUM): Increased by 15% year-on-year and 6% quarter-on-quarter to INR 14,166.00 crore.
Net Interest Income: Rose by 12% year-on-year and 8% quarter-on-quarter to INR 322.00 crore.
Net Interest Margin (NIM): Improved by 37 basis points quarter-on-quarter to 9.30%.
Credit Cost: Improved to 2.70% in Q2FY26 from 3.00% in Q1FY26.
Asset Quality: Gross NPA and Net NPA ratios remained stable at 1.15% and 0.56% respectively.
Capital Adequacy: Maintained a healthy ratio of 24.60% as of September 30, 2025.

Operational Performance

Direct to Customer (D2C) lending increased to 54% of the total AUM.
Excluding rural finance, where exposure remains calibrated, D2C AUM grew 32% year-on-year to INR 6,718.00 crore.
Performing Credit Fund AUM grew by 14% year-on-year to INR 3,198.00 crore.
Placement volumes for H1FY26 were INR 5,399.00 crore.

Board Appointments

The company announced two key appointments to its board:

Ms. Vidya Krishnan: Appointed as an Additional Director (Non-Executive Independent) for a period of 5 consecutive years, subject to shareholder approval. Ms. Krishnan brings extensive expertise in banking, information technology, digital transformation, and business leadership across retail, wholesale, and investment banking.
Ms. Anuradha Rao: Appointed as an Additional Director (Non-Executive, Non-Independent) for a period of 1 year, subject to shareholder approval. Ms. Rao has approximately 36 years of experience in banking and finance, having previously worked at the State Bank of India.

Management Commentary

Ashish Mehrotra, MD & CEO of Northern Arc Capital, commented on the results: "We are witnessing early signs of a credit revival, supported by the repo rate cuts earlier this year and the Government's recent stimulus through GST rate reductions. A normal monsoon is expected to further strengthen rural demand and stability."

He added, "Our AUM grew 15% YoY and 6% QoQ to ₹14,166 crore. The D2C AUM grew 17% YoY, and excluding rural finance — where exposure remains calibrated — D2C AUM growth stood at a strong 32% YoY. Credit cost improved to 2.7% from 3.0% in Q1FY26, driven by a revival in consumption trends and an improving economic environment."

Future Outlook

The company remains confident of achieving its guided AUM growth of 18–20% and Return on Assets (RoA) of around 2.80% for FY26. The management's focus on sustainable lending and long-tenured retail products is expected to help stabilize delinquencies.

Northern Arc Capital continues to empower underserved individuals and businesses, having facilitated the financing of over INR 2.30 trillion cumulatively since 2009, impacting the lives of over 129 million people across India.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.63%	+1.34%	+0.17%	+21.63%	+8.77%	-15.85%

Northern Arc Capital Limited (NSE/BSE: NORTHARC) has witnessed a significant change in its shareholding structure as Catalyst Trusteeship Limited released 40,55,000 equity shares from pledge. The shares, previously held as security for Non-Convertible Debentures (NCDs) issued by Dvara Holdings, were released back to the latter in multiple tranches between April and September 2025.

Impact on Shareholding

The release of shares has resulted in a notable decrease in Catalyst Trusteeship's encumbered shareholding in Northern Arc Capital. Prior to the release, Catalyst Trusteeship held 5.14% of the total share capital, which has now reduced to 2.63%.

Release Details

The share release was executed across several dates:

April 8, 2025
May 2, 2025
June 11, 2025
July 1, 2025
September 22, 2025

Catalyst Trusteeship Limited acted in its capacity as the Debenture Trustee for Dvara Holdings' debenture holders throughout this process.

Company Overview

Northern Arc Capital Limited, listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), has a total equity share capital of 16,14,11,836 shares, each with a face value of INR 10.00. The company's diluted share capital stands at 16,72,89,926 equity shares.

Regulatory Compliance

This transaction was disclosed in accordance with Regulation 29(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The disclosure, filed on September 24, 2025, provides transparency regarding the changes in substantial shareholding of Northern Arc Capital Limited.

Market Implications

While the release of pledged shares does not directly impact Northern Arc Capital's operations, it represents a significant shift in the company's shareholding pattern. Investors and market analysts may view this development as a positive sign, potentially indicating improved financial health for Dvara Holdings, which was able to secure the release of its pledged shares.

As Northern Arc Capital continues to navigate the financial landscape, stakeholders will likely keep a close eye on any further developments in its ownership structure and strategic direction.