Northern Arc Capital Limited — PPTs, 29-07-2025: Investor Presentation

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**1. Financial Highlights:**

Q1FY26 PAT ₹81 Cr, down 13% YoY due to a 99% surge in Credit Costs (₹102 Cr). Pre-Provisioning Operating Profit (PPoP) rose 18% YoY to ₹207 Cr. Lending AUM is ₹13,351 Cr (53% Direct to Customer). Net NPA held at 0.56%.

**2. Strategic Initiatives & Growth Drivers:**

Strategic pivot to Direct to Customer (D2C) lending, targeting >2/3 of AUM in 3 years. Expanding MSME & Consumer Finance. Aims to boost fee income from Fund Management & Placements for 30-40 bps RoA improvement. Tech tools (NuScore, nPOS) enhance operations.

**3. Business Developments:**

Expanded D2C with 11 new MSME branches in Q1FY26. Deepened Consumer Finance partnerships. Continues innovating structured credit solutions for Intermediate Retail Partners.

**4. Market Position & Competitive Advantage:**

Maintains a diversified, granular loan book with solid asset quality (0.56% Net NPA), backed by proprietary ML models & robust collections. Strong, diverse funding, plus proactive liquidity management.

**5. Investor Implications:**

While Q1 profit was impacted by provisions, core operations remain robust. The D2C/fee income strategy offers positive growth potential. Monitor asset quality and execution towards 3-year profitability targets (RoA 3.7-4%, RoE 16-18%).