Synopsis: Tata Capital Limited reported strong Q4 FY26 results with higher revenue and profit, driven by good loan growth, lower costs, improving asset quality, and a positive outlook supported by steady performance and growth guidance.
This Tata Group Stock, engaged in providing loans, wealth management, investment banking and advisory services to individuals, businesses and institutions across India, jumped 1.68 percent after the company reported its March quarterly results, while brokerages shared their insights on the company’s future outlook.
With a market capitalization of Rs. 1,43,837.39 crores, the share of Tata Capital Limited has reached an intraday high of Rs. 346.15 per equity share, rising nearly 1.68 percent from its previous day’s close price of Rs. 340.40. Since then, the stock has retreated and is currently trading at Rs. 338.65 per equity share.
Q4 FY26 Result Walkthrough:
Coming into the quarterly results of Tata Capital Limited, the company’s consolidated revenue from operations increased by 9.12 percent YOY, from Rs. 7,478.10 crore in Q4 FY25 to Rs. 8,160.10 crore in Q4 FY26, and grew by 2.31 percent QoQ from Rs. 7,976.24 crore in Q3 FY26.
In Q4 FY26, Tata Capital Limited’s consolidated net profit increased by 46.65 percent YOY, reaching Rs. 1,466.27 crore compared to Rs. 999.81 crore during the same period last year. As compared to Q3 FY26, the net profit has increased by 15.93 percent, from Rs. 1,264.74 crore. The basic earnings per share increased by 32.58 percent and stood at Rs. 3.54 as against Rs. 2.67 recorded in the same quarter in the previous year, FY2025.
Brokerage Viewpoints:
HDFC Securities maintains an “Add” rating on Tata Capital Limited with a target price of Rs. 335 per share, supported by steady operational performance and improving fundamentals. The company’s Q4 earnings came slightly ahead of expectations, mainly due to lower credit costs, which helped improve profitability. Strong AUM growth of around 28 percent year-on-year, led by SME and corporate segments, highlights robust demand. Additionally, the improving performance of Tata Motors Finance (TMFL), with a turnaround in profitability, is contributing positively to overall earnings.
Looking ahead, the company’s guidance of 23-25 percent AUM growth and 17-18 percent return on equity remains a key factor for investors to watch. Asset quality continues to stay strong due to conservative underwriting practices. With earnings estimates revised upward and valuation at 2.5x FY28 expected book value, the target rationale remains supported by consistent growth, improving profitability, and stable risk profile.
Annual Performance of FY26:
Tata Capital Limited’s net interest income has increased from Rs. 10,694 crore in FY25 to Rs. 12,667 crore in FY26, which has grown by 18.44 percent. The net profit has also grown by 32.22 percent from Rs. 3,665 crore in FY25 to Rs. 4,846 crore in FY26.
Tata Capital Limited’s revenue and net profit have grown at a CAGR of 26.25 percent and 31.48 percent, respectively, over the last five years. In terms of return ratios, the company’s ROCE and ROE stand at 8.58 percent and 12.3 percent, respectively. Tata Capital Limited has an earnings per share (EPS) of Rs. 11.4, and its debt-to-equity ratio is 5.15x.
Management Guidance:
Tata Capital Limited has shared its FY28 guidance, showing steady and healthy growth expectations. The company aims for an AUM growth of around 23-25 percent annually, reflecting strong demand for its lending and financial services. It is also focusing on efficiency, with a cost-to-income ratio of 33-34 percent. At the same time, it plans to keep risk under control, with credit cost and net NPA both expected to remain below 1 percent, indicating good asset quality.
On profitability, Tata Capital expects strong performance with profit growing over 30 percent annually. Its return ratios also look stable, with ROA projected at 2.5-2.7 percent and return on equity at 17-18 percent. Overall, the guidance suggests balanced growth, controlled risk, and consistent returns for the coming years.
Assets Under Management (AUM):
Tata Capital Limited has a well-diversified loan portfolio with a strong focus on retail lending, which makes up about 58.3 percent of its total AUM of Rs. 2,77,275 crore. Within retail, home loans (15.9 percent) and loan against property (14.0 percent) form a significant share, followed by personal and business loans (9.0 percent) and motor finance (9.2 percent). The SME segment contributes 27.4 percent, while corporate loans account for 14.3 percent, showing a balanced mix across segments.
Company Overview:
Tata Capital Limited was founded on March 8, 1991, and is an Indian non-banking financial services company headquartered in Mumbai, Maharashtra. A subsidiary of Tata Sons Private Limited, it serves as the flagship financial services arm of the Tata Group. The company offers a comprehensive suite of retail, corporate, and institutional financial products.
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