Tata Capital Q2 FY27 Results (NSE: TATACAP)
Signal: Earnings grew
The read
The operating inflection is credit-cost-led: Q2FY27 PAT reached ₹1,143.26 crore, +73.1% YoY, as impairment fell 17.7% to ₹623.78 crore and GNPA improved 49bps to 2.40%; however, negative H1 operating cash flow of ₹20,172.80 crore shows that balance-sheet growth is consuming cash, while EPS growth of 28.0% trails PAT because of dilution.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹6,724.14 Cr | +20.2% | +6.1% |
| Net profit | ₹1,143.26 Cr | +73.1% | |
| EPS | ₹2.1 | +28.0% | |
| EBIT margin | 0% |
P&L walk
Standalone PAT rose to ₹1,143.26 crore, +73.1% YoY and +14.4% QoQ, as impairment fell 17.7% YoY and asset-quality ratios improved, although finance costs increased 19.0% YoY.
Key positives
- Total income reached ₹6,724.14 crore, +20.2% YoY and +6.1% QoQ, maintaining the recent acceleration from +7.7% YoY in Q2FY26 to +12.3% in Q3FY26, +9.1% in Q4FY26 and +15.1% in Q1FY27 on the consolidated history series.
- PAT increased to ₹1,143.26 crore, +73.1% YoY, as impairment declined 17.7% YoY to ₹623.78 crore.
- Asset quality improved, with GNPA falling to 2.40% from 2.89% YoY and NNPA to 1.01% from 1.40%, while provision coverage increased to 58.62% from 52.45%.
- Employee costs increased only 8.0% YoY to ₹616.67 crore versus 20.2% total-income growth, supporting cost absorption, although the filing does not disclose an operating-profit line or operating margin.
Key concerns
- Operating cash flow was negative ₹20,172.80 crore in H1FY27 versus negative ₹4,315.56 crore in H1FY26, primarily reflecting a ₹23,180.04 crore increase in loans.
- Basic EPS of ₹2.10 rose only 28.0% YoY while PAT rose 73.1%, indicating the effect of the enlarged post-IPO equity base.
- Finance costs increased 19.0% YoY to ₹3,261.77 crore, broadly tracking income growth and leaving funding costs as a key sensitivity for future margin expansion.
- Capital adequacy declined to 17.28% from 18.46% QoQ as the balance sheet expanded, although it remained slightly above the year-ago 17.24% level.
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