Tata Capital Housing Q2 Profit Rises 28%, AUM Crosses Rs. 75,000Cr

Tata Capital Housing Finance Limited (TCHFL), a subsidiary of Tata Capital, announced strong financial results for the quarter and half-year ended September 30, 2025, recording its highest-ever quarterly profit and a sharp rise in assets under management (AUM).

According to the company’s latest unaudited financial report, AUM grew 30% year-on-year to reach Rs. 75,636 crore, up from Rs. 58,257 crore in the same quarter last year. The growth was supported by a well-diversified loan book and continued expansion across geographies, as the company strengthened its retail and affordable housing segments.

“As of September 30, 2025, our AUM crossed Rs. 75,000 crore, marking a healthy 30% year-on-year rise. This expansion reflects our focus on portfolio diversification and operational efficiency,” said Sarosh Amaria, Managing Director of Tata Capital Housing Finance. “Our quarterly profit after tax stood at Rs. 440 crore, up 28% from last year, reflecting sustained business momentum and resilience.”

Strong Financial Performance Across Key Metrics

For the quarter ended September 2025 (Q2 FY26), Tata Capital Housing Finance reported:

• Net total income at Rs. 899 crore, a 37% increase from Rs. 655 crore in Q2 FY25.
• Profit before tax (PBT) at Rs. 590 crore, up 28% year-on-year from ?460 crore.
• Profit after tax (PAT) at Rs. 440 crore, also rising 28% year-on-year.
• Credit cost remained low at Rs. 13 crore, translating to an annualized credit cost of 0.1%, underscoring the company’s strong asset quality.
• Cost-to-income ratio improved to 32.9%, down from 35.9% a year earlier, reflecting better operational efficiency.
• Return on assets (ROA) remained stable at 2.4%, while return on equity (ROE) stood at 18.5%.

The company’s gross stage 3 assets: a key measure of non-performing loans were contained at 0.8%, while net stage 3 stood at just 0.3%. Its provision coverage ratio remained healthy at 55.6%, and the capital adequacy ratio (CAR) was a comfortable 17.5%, indicating a strong balance sheet position.

This performance highlights TCHFL’s ability to maintain both profitability and asset quality even as competition intensifies across India’s housing finance sector.

Diversified Loan Book and Geographic Expansion Drive Growth

The company’s AUM growth was driven by a balanced mix of home loans, loans against property, and affordable housing finance. Expansion into under-penetrated regional markets also contributed to strong disbursement volumes.

In recent years, Tata Capital Housing Finance has expanded its presence in tier-2 and tier-3 cities, a move aligned with India’s growing demand for affordable and mid-income housing.

The company has also focused on building digital lending channels and strengthening customer servicing platforms, ensuring faster processing and improved borrower experience.

Its net loan book increased by 27% year-on-year, reaching ?73,774 crore, reflecting steady loan demand from both salaried and self-employed borrowers.

Operating Efficiency and Revenue Mix

TCHFL’s revenue mix showed healthy improvement across income streams:

• Net interest income (NII) grew 28% year-on-year to Rs. 694 crore in Q2 FY26.
• Fee income more than doubled, rising 101% to Rs. 181 crore, indicating greater contribution from processing fees and ancillary services.
• Investment income also rose modestly by 15% to Rs. 24 crore.

Operating expenses were well contained, increasing by 26% to Rs. 296 crore, despite expanding operations. This discipline helped lift pre-provisioning operating profit (PPOP) by 44%, reaching Rs. 603 crore.

Market Context and Stock Performance

Ahead of the earnings announcement, Tata Capital’s stock opened at Rs. 328.15 per share on the Bombay Stock Exchange. During the trading session, the stock touched an intraday high of Rs. 333.45 and a low of ?327.50.

Tata Capital’s strong financial results come at a time when investors are closely watching India’s non-banking financial companies (NBFCs) for signs of sustainable growth and asset quality management amid rising competition in the housing finance segment.

The company had earlier reported a consolidated net profit of Rs. 1,040.93 crore for Q1 FY26, marking a 120% rise from Rs. 472.21 crore in the same quarter last year. Total income during that period increased from Rs. 6,557.40 crore to Rs. 7,691.65 crore.

Tata Capital also reported a net profit of ?3,655 crore for FY25, demonstrating consistent profitability even before its public market listing in October 2025. Although its post-listing performance was initially muted due to profit booking by institutional investors, analysts remain optimistic about the company’s fundamentals and long-term prospects.

Focus on Sustainable and Responsible Lending

Tata Capital Housing Finance continues to emphasize responsible lending practices, risk management, and technology adoption. Its digital initiatives, including app-based loan applications, e-verification, and instant eligibility assessments have improved efficiency and customer engagement.

The company has also placed a strong focus on environmental, social, and governance (ESG) goals, financing green-certified housing projects and promoting energy-efficient homes as part of its sustainability agenda.

Outlook

With India’s housing finance sector expected to grow steadily in the coming years, supported by rising urbanization, government-backed affordable housing schemes, and stable interest rates, Tata Capital Housing Finance appears well-positioned to maintain its growth momentum.

As of Q2 FY26, its combination of strong profitability, low credit costs, high capital adequacy, and digital-driven efficiency underscores the company’s ability to sustain leadership in a competitive market.

The latest results reaffirm Tata Capital Housing Finance’s position as one of India’s fastest-growing and most stable housing finance companies, powered by the strength of the Tata brand and a disciplined growth strategy.