Tata Capital shares rallied nearly 5% during Wednesday's intraday trading session, outperforming the broader market after the company reported strong earnings for the second quarter of financial year 2026-27.
The Tata Group company's stock climbed 4.9% to an intraday high of ₹315.65 on the BSE, compared with its previous closing price of ₹300.80.
Trading activity remained elevated, with more than five million shares changing hands across the BSE and National Stock Exchange (NSE).
Profit Rises 51%
Tata Capital reported a 51% year-on-year increase in consolidated net profit to ₹1,660 crore for the September quarter of FY27.
The company had posted a profit of ₹1,097 crore during the corresponding quarter of the previous financial year.
Assets under management (AUM) grew 26%, reflecting continued expansion in the company's lending portfolio.
However, net interest income (NII) increased at a slower pace of 23% to ₹3,700 crore.
Analysts identified pressure on lending margins as the principal concern despite the company's healthy earnings performance.
Net Interest Margins Decline For Fourth Consecutive Quarter
Tata Capital's net interest margin (NIM) declined nine basis points sequentially to approximately 4.9%, marking its fourth consecutive quarterly contraction.
The decline followed a 13-basis-point quarterly increase in the calculated cost of funds, largely associated with external benchmark lending rate and repo-linked bank borrowings.
This increase exceeded the six to seven basis points reported for larger industry peers.
Despite these pressures, Tata Capital's management retained its existing financial guidance.
The company expects medium-term AUM growth of 23% to 25%.
Management also anticipates that NIM combined with fee income will remain stable or improve marginally during the third quarter.
A stronger recovery is expected in the fourth quarter of FY27, supported by lending rate adjustments and an improving product mix.
