Tata Capital Q1 profit jumps 56 per cent on strong lending growth

MUMBAI: Money may not grow on trees, but it certainly found fertile ground in Tata Capital’s loan book this quarter. The Tata Group’s financial services arm delivered a robust start to FY27, reporting a 56.4 per cent year-on-year jump in consolidated net profit, driven by healthy growth in lending income and improved operating performance.

Tata Capital Ltd posted a consolidated net profit of Rs 1,628.18 crore for the quarter ended 30 June 2026, compared with Rs 1,040.93 crore in the corresponding quarter last year. The figure also improved sequentially from Rs 1,466.27 crore reported in the March quarter.

The company’s total income rose 14.7 per cent year-on-year to Rs 8,825.38 crore, up from Rs 7,691.65 crore, as growth across its lending portfolio continued to boost earnings.

The biggest contributor remained interest income, which climbed 14.6 per cent to Rs 7,940.86 crore, compared with Rs 6,931.74 crore a year earlier. Fee and commission income also increased to Rs 454.26 crore from Rs 347.50 crore, while rental income rose sharply to Rs 141.50 crore from Rs 86.77 crore.

The company also recorded a net gain of Rs 184.06 crore on fair value changes, reversing a loss of Rs 32.21 crore in the previous quarter and improving on the Rs 175.19 crore gain reported a year earlier. In addition, net gains on derecognition of financial instruments stood at Rs 92.49 crore.

Despite higher funding costs, profitability remained strong. Profit before tax surged 56.2 per cent to Rs 2,159.12 crore, compared with Rs 1,382.19 crore in the year-ago period.

Total expenses increased to Rs 6,666.87 crore, up from Rs 6,308.91 crore, reflecting the continued expansion of the company’s lending business.

Among the key expense heads, finance costs rose to Rs 4,369.91 crore from Rs 4,065.62 crore, while employee benefit expenses increased to Rs 758.20 crore from Rs 634.62 crore. Impairment of financial instruments declined significantly to Rs 678.35 crore, compared with Rs 908.58 crore in the corresponding quarter last year, indicating improving asset quality. Depreciation and amortisation rose to Rs 154.33 crore, while other expenses increased to Rs 708.08 crore.

The company’s total comprehensive income reached Rs 1,669.18 crore, up from Rs 1,055.31 crore a year ago.

Financial strength also improved during the quarter. Net worth expanded to Rs 46,261.29 crore, compared with Rs 44,824.27 crore at the end of March 2026, while the debt-to-equity ratio stood at 5.31 times, broadly in line with 5.26 times in the previous quarter.

The net profit margin stood at 17.54 per cent, compared with 12.92 per cent in the corresponding quarter last year, underscoring stronger profitability despite rising borrowing costs.

The June quarter highlights Tata Capital’s continued momentum as one of India’s fastest-growing non-banking financial companies. With lending income expanding at a healthy pace, credit costs easing and profitability improving sharply, the company appears well placed to sustain its growth trajectory even as interest rates and competitive pressures remain key variables for the sector.