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 announced its unaudited standalone and consolidated financial results for the quarter and nine months ended December 31, 2025. The Board of Directors approved these results at their meeting held on January 19, 2026, with the company demonstrating strong financial performance across key metrics.

Standalone Financial Performance

The company delivered robust standalone results for Q3FY26, with net profit increasing 9.9% year-on-year to ₹789.86 crores compared to ₹718.76 crores in Q3FY25. Total income grew 7.6% to ₹5,786.08 crores from ₹5,375.49 crores in the corresponding quarter of the previous year.

Nine-Month Performance Highlights

For the nine months ended December 31, 2025, the company maintained its growth trajectory with net profit of ₹2,018.55 crores compared to ₹1,939.49 crores in the previous year, marking a 4.1% increase. Total income for the period reached ₹16,978.46 crores against ₹16,244.45 crores in the corresponding period of FY25.

Revenue Composition and Operational Metrics

Interest income remained the primary revenue driver, contributing ₹5,219.64 crores in Q3FY26 compared to ₹4,901.40 crores in Q3FY25. Fees and commission income increased to ₹361.61 crores from ₹286.27 crores, while rental income grew significantly to ₹125.33 crores from ₹76.87 crores in the previous year quarter.

The company's expense management showed mixed results, with total expenses rising to ₹4,688.23 crores in Q3FY26 from ₹4,420.81 crores in Q3FY25. Finance costs decreased to ₹2,678.12 crores from ₹2,765.32 crores, while impairment on financial instruments increased to ₹753.48 crores from ₹548.91 crores.

Balance Sheet Strength and Key Ratios

The company's financial position strengthened considerably, with net worth increasing to ₹37,359.37 crores as of December 31, 2025, from ₹26,022.25 crores in the previous year. The debt-equity ratio improved significantly to 3.95 times from 5.40 times, indicating better capital structure management.

IPO Impact and Capital Augmentation

The company successfully completed its Initial Public Offering in October 2025, raising ₹6,846 crores through fresh issue of equity shares. The IPO proceeds were primarily utilized for augmenting Tier-I capital base, with ₹6,696.60 crores deployed for this purpose during the quarter. The company's equity shares were listed on NSE and BSE on October 13, 2025.

Exceptional Items and Regulatory Changes

The company reported exceptional charges of ₹36.15 crores in Q3FY26 related to the implementation of new Labour Codes notified by the Government of India in November 2025. These codes consolidate 29 existing labour laws and resulted in incremental compliance costs for the company.

Consolidated Results Overview

On a consolidated basis, the company reported net profit of ₹1,264.74 crores for Q3FY26 compared to ₹1,050.37 crores in Q3FY25, representing a 20.4% increase. Consolidated total income grew to ₹7,978.85 crores from ₹7,111.18 crores in the previous year quarter. The consolidated net worth stood at ₹43,517.82 crores as of December 31, 2025.