Tata Capital Q2 Results: Profit Jumps 51% as Credit Costs Ease (October 27, 2026)

Tata Capital Q2 results, announced on Tuesday, October 27, carried two headline numbers the company clearly wanted on top: a loan book that has now crossed Rs 3 trillion, and consolidated net profit of Rs 1,660 crore for the September quarter, up 51% from Rs 1,097 crore a year ago. Dig a little and the profit jump has as much to do with lower provisions as with loan growth.

Tata Capital Q2 results at a glance

Here’s what the company’s results press release filed with NSE shows for Q2 FY27 (all consolidated, year-on-year):

• Assets under management: Rs 3,08,030 crore, up 26% from Rs 2,43,896 crore. Leave out motor finance and AUM grew 32%.
• Net interest income: Rs 3,696 crore, up 23% from Rs 3,006 crore.
• Fee income: Rs 725 crore, up 9%. Investment income was Rs 255 crore against Rs 105 crore, up 143%.
• Net total income: Rs 4,676 crore, up 24%.
• Pre-provisioning operating profit: Rs 3,025 crore, up 33%.
• Loan losses and provisions: Rs 645 crore, down 17% from Rs 773 crore.
• Profit before tax: Rs 2,380 crore, up 58%.

Against the June quarter, profit rose from Rs 1,547 crore to Rs 1,660 crore, roughly 7% (our calculation from the company’s table).

Cheaper credit costs did the heavy lifting

Operating expenses rose just 10% while net total income rose 24%, so the cost-to-income ratio fell to 35.3% from 39.7%. Annualised opex as a share of the average net loan book came down to 2.3% from 2.6%. Then the bigger swing: annualised credit cost dropped to 0.9% from 1.3%. Put those together and you can see how a 23% rise in NII turns into a 51% rise in profit.

Return ratios moved up as a result. Annualised ROA was 2.3% (1.9% a year ago) and ROE 14.0% (13.0%). Asset quality looks steady: gross stage-3 assets at 1.9%, net stage-3 at 0.8% and provision coverage at 58.6%. Capital adequacy was 17.3%, and The Economic Times reports Tier 1 at 14.7%.

Where the loans are going

Retail plus SME loans make up 85.4% of net AUM, the release says. ET’s breakdown puts the retail book at Rs 1.51 lakh crore, small-business loans at Rs 88,500 crore, corporate loans at Rs 44,862 crore and motor finance at Rs 23,591 crore, with unsecured loans about 10% of net AUM. The gap between 26% overall growth and 32% excluding motor finance tells you motor finance is the slow part of the book.

The housing arm, Tata Capital Housing Finance, grew AUM 26% to Rs 95,098 crore and posted profit of Rs 552 crore, also up 26%.

What management flagged

MD and CEO Rajiv Sabharwal told reporters that revolving credit or flexi loans make up about 3-4% of AUM and that the company is evaluating alternative products in view of proposed curbs on such loans, ET reported. He also said Tata Capital will raise rates on its floating-rate loans by 20-25 basis points from November 1, and told analysts that margins moderated in Q2 but should improve in the second half. On capital, he expects to raise funds in the second half of FY28, depending on loan growth.

For the first half of FY27, profit rose 54% to Rs 3,207 crore. The filing went out after market hours (the cover letter is signed at 4:58 PM), so Wednesday’s trade will be the stock’s first real reaction.

If you track lenders, compare this with Mahindra Finance’s Q2 numbers, and our guide on how to analyse quarterly results of a company explains why provisions deserve as much attention as profit.

Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making any investment decision.