Mumbai, Apr 23 (PTI) Non-bank lender Tata Capital on Thursday reported a 43 per cent jump in the March quarter net profit at Rs 1,502 crore on a consolidated level and said it is exercising "extra diligence" while disbursing loans to MSMEs to manage risks associated with the West Asia crisis.
The company had reported a net profit of Rs 1,052 crore in the year-ago period and Rs 1,257 crore in the preceding September quarter.
The core net interest income came at Rs 3,477 crore for the quarter, on the back of a 29 per cent growth in the assets under management to Rs 86,653 crore and the net interest margin staying stable at 5.2 per cent.
Its managing director and chief executive, Rajiv Sabharwal, told reporters that the company is aiming for an expansion in the net interest margin (NIM) by focusing more on higher-yielding products like retail unsecured and affordable housing.
Without sharing a loan growth target for FY27, he said that the company is sticking to its earlier aim of growing AUMs by 23-25 per cent every year till the end of FY28.
The continuing West Asia crisis will lead to extra diligence while disbursements to micro, small and medium enterprises, he said, adding that field teams are being specifically told to monitor working capital requirements and also availability of raw material.
Stating that the teams are doing weekly reviews of their exposure since the start of the crisis, Sabharwal said Tata Capital's clients seem to be in control of things till now from a raw material availability and supply chain resilience perspective.
Retail and MSME advances form 86 per cent of the AUM at present, and the same number may inch up in FY27 as it doubles down on products like affordable housing, he said.
Interestingly, he said Tata Capital was able to improve credit costs by 0.14 per cent due to conservative lending practices, which included deploying artificial intelligence (AI) tools as well.
He said the motor finance business acquired from the group company earlier in the fiscal year has turned around to deliver profits from the March quarter onwards, and added that only a fourth of its business now comes from Tata Motors' sales.
From an asset quality perspective, the gross non-performing assets ratio improved to 2 per cent at the end of the March quarter from 2.2 per cent in the preceding quarter.
The Tata Capital scrip closed 0.84 per cent up at Rs 340.4 a piece on the BSE on Thursday, as against a 1.09 per cent correction on the benchmark.