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Northern Arc Capital Limited has announced a board meeting regarding its financial results for the third quarter ended December 31, 2024.
Consolidated financials reflect significant growth, with total revenue reaching INR 591.78 crore, marking a 16% year-over-year increase. This growth is attributed to a robust increase in Lending Assets Under Management (AUM), which grew to INR 12,250 crore, alongside a clear shift towards direct-to-customer lending, which now constitutes 52% of the portfolio.
Net profit for the quarter stands at INR 76 crore, up 22% year-over-year, while Earnings Per Share (EPS) has improved to INR 19.82. The increase in profitability can be linked to effective cost management strategies and a growing interest income stream, which reached INR 267 crore for Q3FY25, representing a 10% increase year-over-year.
Operational costs rose by 12% to INR 415.12 crore. The main contributing factors for this increase were higher employee expenses due to expansions and strategic investments. However, the overall cost management remains robust, supported by a favorable interest income-to-expense ratio.
The balance sheet remains healthy with a capital adequacy ratio of 26.1%, providing confidence in solvent operational capabilities and positioning the company well for future growth.
Given the company's strong financial performance, effective cost management, and significant growth potential in the AUM, a hold position is advisable for investors looking at stability and growth prospects in the NBFC space.