Tata Capital Ltd, the financial services arm of the Tata Group, has reported a 51.3% year-on-year rise in consolidated net profit to ₹1,660 crore for the July–September quarter (Q2 FY27), up from ₹1,097 crore a year earlier. The quarter also marked a scale milestone for the non-banking lender, with its loan book crossing the ₹3 trillion mark.
Revenue for the quarter rose 20.7% to ₹9,342 crore, while net total income grew 24% to ₹4,676 crore, according to the results announced on Tuesday, 27 October.
Growth led by retail and SME lending
Assets under management (AUM) stood at ₹3,08,030 crore as of 30 September 2026, up 26% from ₹2,43,896 crore a year ago. Excluding motor finance, AUM growth was a sharper 32%. Retail and SME loans now make up 85.4% of net AUM, with high-margin retail accounting for roughly a quarter of the book. The company operates 1,515 branches across 26 states and union territories.
Sharper efficiency, lower credit costs
Profitability improved across key ratios. The cost-to-income ratio fell to 35.3% from 39.7%, and annualised operating expenses to average net loans eased to 2.3% from 2.6%. Annualised credit cost dropped to 0.9% from 1.3%, lifting return on assets to 2.3% (from 1.9%) and return on equity to 14% (from 13%).
Asset quality held steady, with gross stage 3 assets at 1.9%, net stage 3 at 0.8% and a provision coverage ratio of 58.6%. Total equity stood at ₹47,778 crore and the capital adequacy ratio at 17.3%.
Housing finance arm grows 26%
Wholly owned subsidiary Tata Capital Housing Finance grew AUM 26% to ₹95,098 crore, with profit after tax also up 26% to ₹552 crore. Its gross stage 3 ratio was 0.7% and capital adequacy 17.6%.
AI moves to the core of lending
The results put a spotlight on how deeply artificial intelligence is now embedded in Tata Capital’s operations. MD and CEO Rajiv Sabharwal said more than 70% of retail applications are now processed through AI, and AI-assisted underwriting is used in over 95% of personal and business loan cases, cutting processing turnaround time by more than 39%.
“Artificial intelligence remains a core strategic priority for the organisation,” Sabharwal said, adding that AI agents now handle a significant share of customer interactions and early-bucket collections, helping widen reach and lower servicing costs. Its AI-powered operations platform has crossed 95% adoption across business loan, two-wheeler and microfinance workflows.
“We achieved a significant milestone during the quarter, with our loan book crossing ₹3 trillion, underscoring the scale, diversification and resilience of our franchise,” he said, while cautioning that global uncertainties warrant continued vigilance.
Bigger overseas borrowing programme
The board also approved raising the company’s medium-term note (MTN) programme to $3 billion from $2 billion. Subject to market conditions and approvals, Tata Capital may issue foreign currency bonds in one or more tranches via the external commercial borrowing route, giving it more room to diversify funding as domestic borrowing costs climb.
Shares of Tata Capital closed 0.45% higher at ₹300.80 on the BSE.
