News ArticleTata Capital's Consolidated AUM Surpasses INR3.08 Lakh Crores with 51% Profit Growth in Q2 FY27
Company reports resilient asset quality, expands affordable housing footprint, and leverages digital technology amid evolving interest rate environment
Tata Capital Limited announced strong financial results for the quarter ended September 30, 2026, with consolidated Assets Under Management reaching INR3,08,030 crores, up 26% year-on-year, and profit after tax rising 51% to INR1,660 crores. The company reported stable asset quality, improved provision coverage, and growth in retail and SME segments supported by digital initiatives and a diversified funding profile.
Tata Capital Limited
Earnings Call Transcript
Tata Capital Limited reported consolidated Assets Under Management (AUM) of INR3,08,030 crores for the quarter ended September 30, 2026, marking a 26% year-on-year growth with profit after tax at INR1,660 crores, a 51% increase compared to the previous year. The robust performance reflects growth across its retail and SME portfolio amid stable asset quality and operational improvements.
The company's consolidated AUM grew 26% year-on-year and 6% sequentially; excluding motor finance, AUM growth was 32% year-on-year. Profit after tax rose 51% year-on-year and 7% sequentially. Return on assets stood at 2.3%, and return on equity crossed 14%.
Asset quality remained stable, with Gross Stage 3 assets at 1.9% and a provision coverage ratio improving to 59%. Annualized credit cost declined to 0.9% in Q2 from 1.0% in Q1. Retail and SME businesses constituted about 85.4% of consolidated AUM, underscoring portfolio diversification.
Tata Capital Housing Finance's AUM stood at INR95,098 crores, up 26% year-on-year and 6% sequentially, with profit after tax of INR552 crores. The company expanded its branch network by 23 locations in affordable and micro-housing sectors, reaching 1,515 branches across 1,094 locations in 26 states and union territories.
Digital adoption remains high, with 99% customer onboarding digitally enabled and 98% of retail disbursements supported by automated decisioning. The cost-to-income ratio improved by 438 basis points year-on-year to 35.3%, reflecting enhanced operating efficiency.
Tata Capital's funding profile is supported by a AAA rating and total borrowings of INR2.61 lakh crores, with available liquidity of around INR36,400 crores. The company increased prime lending rates for its floating rate portfolio by 20 to 25 basis points to adjust for changing interest rates, aiming to improve net interest margins in Q4.
Highlights
- Consolidated AUM grew 26% to INR3,08,030 crores in Q2 FY27.
- Profit after tax increased 51% year-on-year to INR1,660 crores for Q2.
- Gross Stage 3 asset ratio stable at 1.9%, provision coverage improved to 59%.
- Retail and SME segments represent 85.4% of consolidated AUM.
- Tata Capital Housing Finance AUM reached INR95,098 crores with 18% ROE.
- Expanded branch network to 1,515 branches in 26 states and UTs for broader reach in affordable housing.
Key Data Snapshot
What happened
- Tata Capital's consolidated Assets Under Management crossed INR3,08,030 crores mark in Q2 FY27, showing 26% annual growth and 6% sequential growth.
- Profit after tax increased by 51% year-on-year to INR1,660 crores in the quarter.
- Retails and SME loans comprise 85.4% of the portfolio, indicating diversification and granularity.
- Stable asset quality with Gross Stage 3 at 1.9% and improved provision coverage to 59%.
Key details
- Excluding motor finance, AUM grew 32% year-on-year.
- Tata Capital Housing Finance AUM reached INR95,098 crores with 18% ROE and INR552 crores profit after tax in Q2.
- Branch network expanded by 23 locations in affordable and micro-housing segments, totaling 1,515 branches in 26 states and union territories.
- Total borrowings stood at INR2.61 lakh crores with available liquidity of INR36,400 crores.
- Cost of funds slightly increased to 7.33% resulting in a 20-25 basis points increase in prime lending rates on floating rate loans.
Operational performance
- Cost-to-income ratio improved by 438 basis points year-on-year to 35.3%, reflecting better efficiency.
- Digital penetration is high with 99% customers onboarded digitally, and 98% of retail disbursements automated via scorecard and business rule engines.
- AI is heavily used to improve customer acquisition, underwriting, operations, servicing and collections, enhancing turnaround times and risk management.
Regulatory and governance context
- The company is monitoring RBI's draft guidelines on revolving credit and evaluating alternate products to comply with potential regulatory changes.
- Engagement with regulators on insurance regulations is ongoing; final impact is currently uncertain.
Highlights
- Consolidated AUM grew 26% to INR3,08,030 crores in Q2 FY27.
- Profit after tax increased 51% year-on-year to INR1,660 crores for Q2.
- Gross Stage 3 asset ratio stable at 1.9%, provision coverage improved to 59%.
- Retail and SME segments represent 85.4% of consolidated AUM.
- Tata Capital Housing Finance AUM reached INR95,098 crores with 18% ROE.
- Expanded branch network to 1,515 branches in 26 states and UTs for broader reach in affordable housing.
Disclosures
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
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