Northern Arc Capital’s shares surged on Monday after the non-banking financial company (NBFC) reported a nearly threefold increase in net profit for the March quarter, fueled by robust growth in interest income and improved asset quality. The stock closed up 8% at ₹310.75, reaching a 52-week peak of ₹321.70, compared to the previous closing price of ₹287.30.
After market hours on Friday, the company announced a net profit of ₹139 crore in Q4 FY26, up from ₹47 crore in the same quarter of the previous year. Total income rose to ₹735 crore for the January-March quarter of FY26, compared with ₹593 crore a year earlier, while net interest income increased by 21% year-on-year to ₹387 crore. Total expenditure was reported at ₹552 crore for the quarter, slightly higher than the ₹545 crore recorded in the previous year.
Asset quality also showed signs of improvement, with the gross non-performing asset (NPA) ratio decreasing to 1.2% as of March 31, 2026, down from higher levels earlier, and the net NPA ratio easing to 0.6%.
Following the strong earnings report and improved growth outlook, brokerages expressed confidence in the stock. DAM Capital noted that the stock is trading at relatively low valuations of approximately 0.9 times FY28 estimated book value and close to 7 times FY28 estimated earnings. The brokerage anticipates a compound annual growth rate (CAGR) of over 22% in growth and more than 25% in earnings, supported by a return on equity exceeding 14% by FY28. They set a target price of ₹400, indicating potential upside of around 40% over the next year.
Motilal Oswal maintained its buy rating with a target price of ₹390, citing strong growth across key operational metrics in Q4 FY26. The brokerage reported that management expresses confidence in sustaining growth momentum in FY27, bolstered by recovery in the microfinance segment and continuous progress in micro, small, and medium enterprises (MSME) and consumer finance initiatives. They added that the company’s credit solutions division provides a consistent fee income stream, with a focus on asset quality and prudent risk management positioning it for sustainable long-term growth. Motilal Oswal projects a CAGR of around 21% in assets under management and 34% in profit after tax from FY26 to FY28.
ICICI Securities also upheld its buy rating, raising the target price to ₹370 from ₹340, valuing the stock at 1.35 times FY27 estimated book value. They emphasized potential risks, including regulatory changes in digital lending and the performance of the rapidly expanding MSME loan portfolio.
Publishing on May 11, 2026.
