Northern Arc Capital Limited – Investor Presentation Summary

Key Operational Highlights

  • Assets Under Management (AUM) grew by 19% QoQ to ₹16,855 crore as of June 30, 2026
  • Direct-to-customer (D2C) lending AUM increased to 64% of total AUM
  • One of the lowest PAR 30+% among MFI peers
  • Gross Transaction Value not specified in presentation

Key drivers of operational performance: Phygital model for MSME lending, sustained consumption demand in Consumer Finance, and regained momentum in Rural Finance following conscious calibration.

Segment-wise Performance

  • Intermediate Retail: AUM ₹6,089 crore, GNPA 0.8% (Jun-26) vs 0.7% (Mar-26), Credit Cost 1.5% (Q1FY27) vs 0.7% (Q1FY26)
  • MSME: AUM ₹3,761 crore, GNPA 2.6% (Jun-26) vs 3.5% (Mar-26), Credit Cost 0.9% (Q1FY27) vs 1.8% (Q1FY26)
  • Consumer: AUM ₹5,802 crore, GNPA 0.2% (Jun-26) vs 0.3% (Mar-26), Credit Cost 5.0% (Q1FY27) vs 6.1% (Q1FY26)
  • Rural: AUM ₹1,203 crore, GNPA 0.02% (Jun-26) vs 0.04% (Mar-26), Credit Cost 3.5% (Q1FY27) vs 7.7% (Q1FY26)

Explanation of significant changes in segment performance: MSME segment showed improved asset quality with GNPA reduction, while all segments demonstrated controlled credit costs.

Financial Highlights

Revenue: ₹677 crore (Q1FY27) vs ₹540 crore (Q1FY26)

EBITDA: Not explicitly specified in presentation

PAT: ₹114 crore (Q1FY27) vs ₹78 crore (Q1FY26)

EPS: Not specified

Margins: NIM at 8.3% (FY26), Cost to Income Ratio 36.8% (Q1FY27) vs 36.4% (Q1FY26)

YoY/QoQ comparison: PAT increased 46% YoY, Net Revenue increased 28% YoY

Drivers of financial performance: Higher net interest income (32% YoY growth) and controlled operating costs

Comparison to market estimates: Not provided

Key Risks: Not explicitly disclosed in presentation

Geographical Revenue Split

Domestic vs Export/Regional Revenue: Not specified in presentation

Regional Breakdown: Not specified

Balance Sheet Snapshot

Net Debt/Equity: Not explicitly calculated but borrowings of ₹12,440 crore against equity of ₹4,056 crore (Jun-26)

Reserves: Part of equity component

Current Assets/Liabilities: Cash and bank balances ₹595 crore, Other financial liabilities ₹602 crore (Jun-26)

Working Capital/Leverage Metrics: Not specifically provided

Financial Health Insights: Strong liquidity position with diversified funding sources

Capex & Cash Flow Health

Capital Expenditure: Not specified

Free Cash Flow: Not specified

Operating Cash Flow: Not specified

Net Debt Movement: Borrowings increased to ₹12,440 crore (Jun-26) from ₹9,422 crore (Mar-26)

Investment Rationale: Technology investments in digital lending platform nPOS

Strategic & R&D Initiatives

Investments in Innovation: Proprietary digital lending platform nPOS, AI/ML modeling, API integrations

Expected impact on growth: Digitalization has helped conserve ~11 crore sheets of paper

Strategic Rationale: Expanding access to credit for underserved households and enterprises through technology-driven solutions

Industry Trends & Business Environment

Macro/Industry Trends: Sustained consumption demand, growing retail credit needs of India's underserved households and businesses

Impact on Company: Enabled 19% QoQ AUM growth and expansion across focused sectors

Management Commentary & Growth Outlook

Strategic Outlook: Demonstrating growth in AUM and profitability across business cycles

FY Guidance: Not explicitly provided

Market Share Targets: Not specified

Risks and Opportunities: Not specifically highlighted

ESG Updates

  • ESG Impact Rating: ICRA ESG Impact Rating 81 - Outstanding
  • Environmental Impact: Score 78 (Good), low direct environmental footprint, green-certified facilities
  • Social Impact: Score 87 (Outstanding), facilitated over ₹2.5 lakh crore in financing, impacting 140 million lives across 680 districts
  • Governance: Score 80 (Outstanding), ~95% Board attendance, dedicated Board-level ESG Committee

Additional Business Information

  • Credit Solutions business with 152 originator partners
  • Risk-free, fee-based businesses
  • Diversified sources of funding with proactive liquidity management
  • AA-(Stable) ratings from ICRA Limited & India Ratings
  • Operating through 432 branches, 57 digital partners and 368 Originator Partners