Tata Capital Q1 FY27 Results (NSE: TATACAP)
Signal: Earnings grew
The read
Growth trajectory accelerated: AUM grew 22% YoY (ex-motor finance +28%), PAT jumped 56% YoY — the fastest in recent quarters — driven by a 60bps improvement in credit cost (1.0% vs 1.6%) and stable margins. Asset quality remains healthy with GS3 at 1.9% and PCR at 56.9%. The cost-to-income ratio improved 40bps YoY to 36.4%, reflecting operating leverage as headcount grew only ~5%. The gold loan acquisition (Yogloans) provides a new growth vector in secured retail lending.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹4,455 Cr | 23% | 7.5% |
| EBIT | ₹2,835 Cr | 24% | |
| Net profit | ₹1,547 Cr | 56% | |
| EPS | ₹0 | N/A | |
| EBIT margin | 63.6% |
P&L walk
Net total income grew 23% YoY to ₹4,455 Cr, with NII up 25% and fee income up 20%. Pre-provision profit rose 24%, but PAT grew faster at 56% due to a sharp 26% YoY decline in loan loss provisions to ₹676 Cr. Credit cost improved 60bps annualized to 1.0%, while opex grew in line with income (cost-to-income improved 40bps to 36.4%).
Key positives
- PAT up 56% YoY to ₹1,547 Cr, the strongest growth in recent quarters.
- AUM grew 22% YoY (ex-Motor Finance +28%), with Retail+SME at 85.4% of AUM.
- Credit cost improved 60bps YoY to 1.0% annualized, while GS3 remained stable at 1.9% (NS3 0.8%).
- Cost-to-income ratio improved 40bps to 36.4%, with headcount growth of only ~5% vs 22% AUM growth — strong productivity gains.
- Annualized ROA expanded 50bps to 2.3% and ROE 120bps to 13.7%.
- Housing subsidiary (TCHFL) reported AUM growth of 24% YoY, stable low credit cost (0.05%), and ROA of 2.5%.
Key concerns
- EPS not reported — cannot assess dilution vs PAT growth.
- QoQ provisions rose 16%, although annualized credit cost remains low at 1.0%.
- Motor Finance segment (excluded from adjusted AUM) appears to be a drag on overall AUM growth (22% vs 28% ex-motor).
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