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Tata Capital’s 26% AUM growth masks sharp divergence across businesses

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Tata Capital’s 26% AUM growth masks sharp divergence across businesses

Motor finance remained the principal weak spot. Its net loan book declined 17% year on year and 3% sequentially to Rs 23,600 crore. Disbursements, however, increased to Rs 2,400 crore in the September quarter from Rs 2,000 crore in the preceding quarter.

Tata Capital’s AUM grew 26% year on year to Rs 3.08 lakh crore in Q2FY27, led by corporate lending growth of 54% and SME lending growth of 34%.

Motor Finance remained a drag, with its net loan book declining 17% year on year to Rs 23,600 crore and gross Stage 3 assets rising to 8.7%.

Net interest margin fell 10 basis points sequentially to 4.95% as borrowing costs rose, but management expects margins to stabilise in Q3FY27 and recover more strongly in Q4.

The brokerage retained its Neutral rating with a target price of Rs 340, while estimating AUM and profit after tax to grow at 24% and 34% annualised, respectively, between FY26 and FY28.

08 lakh crore in the September quarter, but growth varied sharply across businesses, with corporate lending expanding 54%, SME lending 34% and retail lending 17%. While Motor Finance continued to contract, strong momentum in SME, corporate and housing finance supported overall growth. 84 lakh crore. The divergence was also evident in profitability trends. 95% as borrowing costs rose, even as net interest income increased 23% year on year to around Rs 3,700 crore. Consolidated profit after tax, after non-controlling interests, grew 51% to Rs 1,660 crore. Other income rose 27% to around Rs 980 crore and included a gain of Rs 186 crore from the derecognition of associates, according to Motilal Oswal Financial Services.


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