Event Participants
Executives
3 Rajiv Sabharwal (MD & CEO), Rakesh Bhatia (CFO), Sandeep Tripathy (Head of Strategy & IR)
Analysts
12 Abhijit Tibrewal (Motilal Oswal), Anand Dama (Nuvama), Anuj Singla (J.P. Morgan), Avinash Singh (Emkay Global), Manish (ETI), Nischint Chawathe (Kotak), Ram Kumar (Business Line), Sajal Raj (Zenflow Finance), Shreya Shivani (Nomura), Shipra Petkar (Financial Express), Shubhana Sheik (Mint), Sonal Gandhi (AMSEC), Srishti Sharma (ETBFSI), Sushma (Business Standard), Vijay Sharma (Laxmi Capital), Viral Shah (IIFL Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated AUM | ₹2.91 lakh crores | +22% YoY, +5% QoQ; excl. Motor Finance: +28% YoY, +6% QoQ |
| Consolidated Disbursements | ₹46,212 crores | +33% YoY; unsecured retail disbursements +50% YoY |
| Profit After Tax | ₹1,547 crores | +56% YoY, +3% QoQ |
| ROA (Consolidated) | 2.3% | 2.5% excl. Motor Finance; target 2.6% by FY28 |
| ROE (Consolidated) | 13.7% | — |
| Net NPA | 0.8% | -10 bps QoQ; Gross Stage-3 improved to 1.9% from 2.0% |
| PCR | 57% | Maintained; PCR variation driven by Stage-3 asset ageing mix |
| Credit Cost | 1.0% | -26% YoY (from 1.6% in Q1 FY26); in line with FY28 guidance corridor |
| Cost-to-Income | 36.4% | -190 bps QoQ; OPEX +21% YoY (+16-17% normalized for appraisal cycle change) |
| NIM / Margin Outlook | ~10 bps improvement targeted for FY27 | Two-thirds from margin expansion, one-third from operating leverage |
| Cost of Funds | 7.28% | +13 bps QoQ (from 7.15%); expect +8-10 bps for full year FY27 |
| Total Borrowings | ~₹2.45 lakh crores | Bank loans 40%, NCDs 33%, ECB/MTN 11-12.6%, CP/WCDL 8% |
| Liquidity Buffer | ~₹29,000 crores | Ample headroom for growth and volatility absorption |
| Capital Adequacy | 18.5% | Well above regulatory requirement; strong CET1 ratio |
| Debt-to-Equity (Consolidated) | 5.3x | Target 6.2-6.3x; Housing entity 7.2-7.3x, NBFC 5.5-5.6x |
| Total Equity | ₹46,237 crores | — |
| On-role Employees | 30,170 | +~5% YoY; hiring focused on frontline sales and collections |
| Branch Network | 1,491 branches, 1,091 locations | +14 branches QoQ; 27 states/UTs; 8.8 mn customers |
| Housing Finance AUM | ₹89,416 crores | +24% YoY; PAT ₹532 cr (+29% YoY); credit cost 0.05%; Net NPA 0.3% |
| Motor Finance AUM | ₹24,445 crores | Sequential decline; legacy run-off reduced from ₹3,139 cr to ₹945 cr YoY; profitable in Q1 |
Geographic & Segment Commentary
Housing Finance: AUM grew 24% YoY to ₹89,416 crores with PAT up 29% to ₹532 crores. Credit costs remain exceptionally low at 0.05% with Net NPA at 0.3%. Focus on Affordable Housing (23% YoY AUM growth), Micro Housing (currently ₹1,200 cr, targeting 100% growth in FY27), and Prime LAP drives margin expansion. Operating 350 branches at 30% cost-to-income. ROA 2.5%, ROE 18.4%.
Motor Finance: Book moderated to ₹24,445 crores amid measured growth approach. Legacy portfolio run-off declined sharply from ₹3,139 crores (Jun'25) to ₹945 crores (Jun'26). Business profitable in Q1 FY27 with asset quality aligned to expectations. Focus on portfolio diversification beyond Tata Motors, branch/workforce rationalization, and mix shift toward ILMSCV from HCV. Target ROA 2% by FY28.
Gold Loans (New Segment): Proposed acquisition of Yogloans (88.6% stake, ₹318 cr pre-money valuation, ₹93 cr primary infusion) adds ₹708 cr AUM, 162 branches, 32k customers across 4 southern states. RBI approval expected by end-CY2026. Target: 500+ branches and ₹4,000-5,000 cr AUM over 2.5-3 years post-approval. Will leverage Tata Capital's brand, cost of funds, and AI/tech stack for operational excellence.
Retail & SME Lending: Core focus at 85.4% of consolidated portfolio (target range 85-88%). Unsecured retail disbursements surged 50% YoY; disbursement growth (38% YoY for high-margin products) outpacing book growth (10% YoY), with catch-up expected over 2-3 quarters. Microfinance <1% of book, targeting <2% via JLG model with digital KYC/collections.
Corporate Lending: Growth strong in Q1 but management indicates segment may have "maxed out" near current levels. Will maintain Retail+SME at 85-88% via sell-down/syndication of corporate originations. Selective participation in high-quality opportunities within diversified risk framework.
Company-Specific & Strategic Commentary
AI & Digital Transformation: 98% digital onboarding; AI drives 90% welcome calls, 15% call-center sourcing, 85-90% marketing creatives, 90%+ document processing in PL/BL (35% faster turnaround), 70% retail applications via AI workflows (40% productivity gain, 25% lower manpower cost/file), 70%+ email responses AI-generated (90%+ same-day resolution), 95% pre-delinquency outreach via bots (30% early-bucket recoveries). 12,000+ employees trained on AI platforms. Expected to contribute ~10-15 bps ROA improvement over 2 years.
International Funding Diversification: Successfully raised USD 400 mn 3.5-year Reg S bond at T-Bill +107 bps (4x oversubscribed). First issuance post S&P BBB rating upgrade and equity listing. Foreign borrowings now 12.6% of total (up from ~11%), broadening funding access and optimizing cost of funds.
Motor Finance Transformation: Portfolio transition on track with legacy run-off decelerating. Profitability achieved from Q4 FY26, sustained in Q1 FY27. Strategic focus on used vehicle mix (40-42% target), ILMSCV growth, and per-segment yield improvement to drive margins toward 2% ROA by FY28.
High-Margin Product Scaling: Disbursements across Affordable Housing, Micro Housing, Secured Business Loans, Unsecured Retail grew 38% YoY with healthy blended IRR. Book growth lagging disbursement growth but expected to converge over 2-3 quarters, improving portfolio yield and NIMs.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Consolidated AUM Growth (FY27) | 23-25% | On track; Motor Finance expected to reverse decline from Q3 FY27 |
| Credit Cost (FY27/FY28) | ~1.0% | Q1 at 1.0%; guided corridor maintained; new gold loan product safer than existing mix |
| Cost-to-Income (FY28) | 33-34% | From 36.4% in Q1 FY27; driven by AI/digital productivity and operating leverage |
| ROA (FY28) | 2.6% | From 2.3% currently; 2/3 from margin expansion, 1/3 from OPEX optimization |
| Motor Finance ROA (FY28) | 2.0% | Business profitable from Q4 FY26; transformation on track |
| NIM Improvement (FY27) | ~10 bps | Cost of funds +8-10 bps; asset yields to grow faster via mix shift and per-product pricing |
| Cost of Funds Increase (FY27) | 8-10 bps | Based on daily average repricing; incremental borrowings at slightly higher rates |
| OPEX-driven ROA Improvement (FY27) | 3-4 bps | Normalized OPEX growth ~16-17% YoY vs AUM growth 23-25% |
| Capital Sufficiency | Well capitalized till Jun-Sep |