Northern Arc's Q1 profit jumps 41% to ₹114 cr; D2C lending tops ₹10,000 cr
Net interest income up 32%; gross NPAs improve to 1.0%; D2C now 64% of portfolio.
— 4 earlier stories on Northern ARC Capital Ltd. →What's new
- Net profit rose 41% YoY to ₹114 crore, a record June-quarter.
- Direct-to-customer lending crossed ₹10,000 cr, now 64% of AUM.
- Gross NPA improved to 1.0% from 1.2% QoQ; CAR at 22.7%.
Why this matters
Northern Arc is executing its retail pivot well. The D2C milestone and steady asset quality validate the strategy. But with a P/E of 11.5 and ROE of 8.9%, the market already prices in this trajectory.
What we're watching
- Whether NIMs sustain as D2C share grows.
- Any update on the YES BANK partnership for credit deployment.
- Debt fund launches after SEBI approvals.
The full read
Northern Arc's Q1 numbers are solid: profit of ₹114 crore, up 41%; NII up 32%; AUM growth of 26%. The standout is direct-to-customer lending crossing ₹10,000 crore — now 64% of the portfolio. That shift is the story. Asset quality held, with gross NPAs at 1.0%, down from 1.2% last quarter. The capital adequacy ratio of 22.7% leaves room. Routine. Yet with a trailing P/E of 11.5 and ROE of 8.9%, the stock already reflects this trajectory. The market priced in the pivot. The open question is whether margins can hold as the book shifts further toward retail, and the two SEBI-approved debt funds add a future revenue line that could extend the run but was already in the works. A routine beat, well executed.
Questions answered
- How much did net profit grow in Q1 FY27?
- Net profit rose 41% year-on-year to ₹114 crore, a record for the June quarter.
- What is the direct-to-customer lending figure?
- Direct-to-customer lending crossed ₹10,000 crore for the first time, now accounting for 64% of the total AUM.
- How did asset quality change from last quarter?
- Gross non-performing assets improved to 1.0% from 1.2% in the previous quarter.
- What drove the performance?
- Managing Director Ashish Mehrotra attributed the performance to disciplined execution and a focus on retail lending.
- What regulatory approvals were received during the quarter?
- The company received SEBI approvals for two debt funds during the quarter.
- Is this a routine quarterly result?
- Yes, the analyst rationale labels it a routine filing with no new corporate action or unexpected development.
Northern ARC Capital Ltd.
Latest quarter · Mar 2026
Leverage & growth
Story so far
All notes on NORTHARC →- 27 Jul 2026 · 4:40 PM IST Northern Arc's Q1 profit jumps 41% to ₹114 cr; D2C lending tops ₹10,000 cr
- today Northern Arc profit hits record ₹114 cr, but ROA target softens
- today Northern Arc's Q1 profit hits record ₹121.8 cr; AUM up 26%
- today Northern Arc's Q1 profit hits record ₹114 cr on loan growth, lower bad loans
- 42d ago Northern ARC links up with YES BANK in non-binding partnership