Tata Capital Limited announced strong financial results for Q3FY26, demonstrating sustained business momentum across its diversified lending portfolio. The company reported consolidated assets under management (AUM) of ₹2,60,698 crores, representing a 7% quarter-on-quarter growth, while profit after tax (PAT) reached ₹1,290 crores, marking an 18% increase from the previous quarter.

Consolidated Performance Including Motor Finance

The company's overall performance for Q3FY26 showed robust growth across key financial metrics. Net total income grew 7% quarter-on-quarter to ₹4,051 crores, while the cost-to-income ratio improved to 38.4% from 39.7% in Q2FY26.

A significant milestone was achieved as the Motor Finance business reached PAT breakeven during Q3FY26, excluding the impact of new labour codes. This segment, which constitutes approximately 10% of net AUM, reflects the company's focused approach on improving business metrics before accelerating growth.

Performance Excluding Motor Finance Business

Excluding the Motor Finance segment, Tata Capital demonstrated exceptional year-on-year growth. AUM expanded 26% to ₹2,34,114 crores compared to ₹1,86,404 crores in Q3FY25, while PAT excluding non-recurring items surged 39% to ₹1,285 crores from ₹922 crores in the corresponding previous quarter.

The company maintained strong operational efficiency with annualized operating expense on average net loan book improving to 2.3% in Q3FY26 from 2.4% in Q3FY25. Credit costs remained controlled at 1.0% compared to 1.1% in Q2FY26.

Credit Quality and Risk Management

Tata Capital maintained robust credit quality indicators across its portfolio. The company reported gross stage 3 assets at 2.2% and net stage 3 at 1.0% as of December 31, 2025. The provision coverage ratio stood at 53.6%, demonstrating prudent risk management practices.

The company's retail and SME segments constitute approximately 87% of net AUM, with retail unsecured forming 10.4% of net AUM. Management noted that unsecured retail disbursements, which were moderated earlier as a prudent risk measure, have seen a gradual uptick with slippages coming down.

Housing Finance Subsidiary Performance

Tata Capital Housing Finance Limited (TCHFL), the company's wholly-owned material subsidiary, delivered strong results for Q3FY26. The housing finance company achieved 30% year-on-year AUM growth to ₹81,585 crores and 25% YoY PAT growth to ₹464 crores excluding non-recurring items.

TCHFL maintained excellent asset quality with gross stage 3 at 0.8% and net stage 3 at 0.4%, while the provision coverage ratio stood at 54.2%. The subsidiary's capital adequacy ratio was 16.9% as of December 31, 2025.

Management Commentary and Outlook

Managing Director and CEO Rajiv Sabharwal highlighted the company's sustained business momentum with broad-based growth across products. He emphasized that the distribution network and strategic focus on digital and GenAI capabilities continue to drive operating efficiencies. The company operates through a pan-India network of 1,505 branches across 27 states and union territories, positioning it well to leverage India's robust growth outlook supported by favorable demographics and strong macroeconomic fundamentals.

Tata Capital Limited reported robust consolidated financial results for the quarter ended December 31, 2025, demonstrating strong sequential growth momentum. The company announced its unaudited standalone and consolidated financial results, with the Board of Directors approving these results at their meeting held on January 19, 2026.

Outstanding Quarterly Performance

The company delivered exceptional sequential growth in Q3FY26, showcasing significant improvement in profitability and operational metrics:

The remarkable 44% quarter-on-quarter surge in net interest income reflects healthy lending growth and improving asset yields across the company's diversified portfolio. This strong performance underscores the company's ability to capitalize on robust demand for both secured and unsecured credit products.

Year-on-Year Growth Trajectory

Comparing with the previous year, Tata Capital maintained its growth momentum with consistent performance improvements:

Business Segment Performance and Strategic Developments

Tata Capital's assets under management increased steadily, supported by broad-based growth across retail, SME, and housing finance segments. The Motor Finance business achieved a significant milestone by reaching PAT breakeven during the quarter, following its integration in May 2025.

The management highlighted that unsecured retail disbursements, which had been moderated previously as a precautionary measure, have started to pick up gradually. This strategic approach supports revenue growth while maintaining asset quality standards. Credit quality remained healthy, with early indicators showing stable portfolio performance across all major segments.

Housing Finance Subsidiary Excellence

Tata Capital Housing Finance Limited (TCHFL), the company's wholly owned housing finance subsidiary, contributed significantly to overall growth:

Technology and Operational Enhancements

The company continued strengthening its distribution network and digital capabilities, leveraging technology and GenAI solutions to enhance efficiency and customer experience. This technological advancement supports the company's growth strategy while improving operational efficiency across all business segments.

Market Performance and Outlook

Shares of Tata Capital were marginally down on the NSE, closing at ₹359.25, down ₹0.10 or 0.03% as of January 19, 2026. The company's strong financial performance, combined with its diversified business model and technological investments, positions it well for continued growth in the financial services sector.