Tata Capital Ltd has announced its financial results for the second quarter of FY26 on October 28, 2025, marking its first quarterly report since listing earlier this month. The Tata Group’s financial services arm posted a consolidated net profit of ₹1,097 crore for the July–September quarter, registering a 2% year-on-year (YoY) increase from ₹1,076 crore in the same period last year and an 11% sequential rise from ₹990 crore in Q1 FY26.
Revenue from operations rose 8% YoY to ₹7,737.18 crore compared with ₹7,184.78 crore a year ago, while total income grew 4% sequentially to ₹3,774 crore. This performance reflects broad-based growth across business segments, supported by resilient credit quality and ongoing digital initiatives.
AUM and Operational Performance
As of September 30, 2025, Tata Capital’s assets under management (AUM) stood at ₹2,43,896 crore, marking a 2.7% sequential increase from the previous quarter’s ₹2,37,508 crore. The company reported that its retail and SME portfolios together account for nearly 88% of the total gross loan book, while retail unsecured loans comprise 11.6%.
Gross and net non-performing asset (NPA) ratios remained stable at 1.6% and 0.6%, respectively, consistent with Q1 FY26 levels. Tata Capital noted that asset quality within the unsecured retail loan segment has begun showing improving trends, aided by stronger collection mechanisms, especially in the motor finance division.
Operating expenses rose 10% YoY to ₹6,246.15 crore, and the net profit margin for the quarter stood at 14.18%, compared with 14.97% in the same period last year. The company had a total employee strength of 29,992 as of September-end.
Management Commentary and Outlook
Rajiv Sabharwal, Managing Director and CEO of Tata Capital, described Q2 FY26 as a “strong quarter marked by broad-based momentum.” He highlighted that excluding the motor finance business, the company’s AUM grew 22% YoY, driven by sustained performance across all key segments.
He added that credit quality remained robust across categories, supported by a 30 basis points reduction in annualised credit cost compared with Q1 FY26. Tata Capital continues to leverage its digital and GenAI capabilities to enhance customer experience and operational efficiency.
Sabharwal also noted that the integration of the Tata Motors Finance business, acquired on 8 May 2025, is progressing well. The focus has been on stabilising operations before accelerating growth. The company has transitioned to a multi-OEM model, realigned its portfolio towards used and small commercial vehicles, and strengthened underwriting and collection frameworks. A turnaround in the motor finance business is expected by Q4 FY26.
Macro Factors and Market Position
The company believes that the government’s recent GST cuts will support consumption and economic activity in the second half of FY26, creating a favourable environment for growth. Sabharwal said Tata Capital remains committed to building on its current momentum and delivering consistent value for all stakeholders.
Tata Capital shares, which made their market debut earlier this month at ₹330 per share—a 1.23% premium to the IPO price—closed with marginal gains at ₹330.60 apiece following the results announcement. The company released its Q2 FY26 results post-market hours on 28 October 2025, and the stock remains on investors’ radar as markets reopen.
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Conclusion
Tata Capital’s first earnings report as a listed entity underscores stable profitability, consistent asset quality, and a disciplined approach to growth. With expanding AUM, improved credit metrics, and a strengthening digital infrastructure, the company is well-positioned to capture future opportunities in India’s financial services landscape. Its progress in integrating the motor finance business and leveraging technology-driven efficiencies reinforces Tata Capital’s long-term growth trajectory.
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