Northern Arc Capital Ltd. · NSE:NORTHARC
Northern Arc Capital — Q1 FY2026 Earnings Presentation
45 slides from Northern Arc Capital's earnings presentation, July 2025
Slide 1: Investor Presentation Q1FY26
Investor Presentation Q1FY26 Financing the Retail Credit Needs of India’s AA-(Stable) Underserved Households & Businesses across By ICRA Limited & India Ratings focused sectors 1
Slide 2: Disclaimer
Disclaimer "This presentation and accompanying slides (the “Presentation”) has been prepared by Northern Arc Capital Limited (“Company”) to be presented during the analyst call as required under Regulation 46 (2)(o) of the SEBI (LODR) Regulations, 2015, and is not for release, distribution or public
Slide 3: Content
Content… Direct to Customer 01 Business Overview 02 Lending Intermediate Retail 03 Credit Solutions 04 Risk Management Robust Technology Strong Liability 05 Stack 06 Franchise 07 Financials 08 Strategy Board & 09 Management 10 Sustainability 3
Slide 4: Business Overview
Business Overview 4
Slide 5: Business Matrix – Q1FY26
Business Matrix – Q1FY26 Gross Transaction Volume Placements Direct to Customer Mix INR 7,411 Cr INR 2,838 Cr 53% -3% 10% +103 bps Lending AUM Fund AUM Direct Customers INR 13,351 INR 3,174 Cr 21,60,652 12% 15% 14% Branches Retail Lending Partners Origination Partners 369 54 353 26 3 18 YoY growth 5
Slide 6: Financial Matrix – Q1FY26
Financial Matrix – Q1FY26 PPoP NIM Opex (%) INR 207 Cr 8.9% 3.5% 18% -22 bps -57 bps PAT RoA RoE INR 81 Cr 2.4% 9.3%1 -13% -72 bps -540 bps (1) Raised INR 500 Crores of Equity Capital Net NPA Networth Book Value / Share 0.56% INR 3,532 Cr INR 219 +45 bps 27% 12% YoY growth 6
Slide 7: Demonstrating growth in AUM and profitability across business cycles
Demonstrating growth in AUM and profitability across business cycles Asset under management INR crore MFI overleverage Demonetization IL&FS Crisis Covid Pandemic stress 13,634 11,710 9,009 7,108 4,342 5,221 2,734 3,664 3,883 1,019 1,655 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Mar'21 Mar'22 Mar'23
Slide 8: Northern Arc: Business Model
Northern Arc : Business Model Financing the Credit Needs of India’s Underserved Households & Businesses Sectors 369 2 mn + MSME Consumer Rural Customers Branches Direct to Customer Channels Lending ➢ Branches ➢ Digital ➢ Partnership 54 Lending – AUM INR 7,142 Cr Retail Lending Partners Underwriting
Slide 9: Direct to Customers Lending
Direct to Customers Lending 9
Slide 10: Direct to Customers Lending: Built a strong retail engine
Direct to Customers Lending: Built a strong retail engine Northern Arc Customer Base Leveraged learnings from the IR business to build : • A strong D2C engine MSME Consumer Finance Rural Finance • A robust underwriting and # Customers 40,000+ ~16,00,000 5,20,000+ product program Direct – Branch / •
Slide 11: Growth: Strong growth led by expansion and partnerships
Growth : Strong growth led by expansion and partnerships Assets under Management 64% CAGR (Mar-21 to Mar-25) 7,064 7,142 INR crore Multi-channel Distribution Model 953 1,100 6,313 5,833 1,498 1,512 369 54 3,502 Branches Retail Lending Digital 3,390 Partners Partnership 3,385 2,806 2,300 Backed by ro
Slide 12: MSME
MSME Building strong footprint to scale granular portfolio Northern Arc’s Value Proposition End to end digital journey Competitive pricing 84 Branches Added 11 branches in Q1FY26 Handholding till Ease of documentation 13 7 loan closure 7 States 2 11 Strong in-house collections Average Bureau – 600+
Slide 13: Consumer Finance
Consumer Finance Assets under Management 120% CAGR (Mar-21 to Mar-25) Live Partners Ticket Size 23 Rs. 50,000 – 5,00,000 INR crore Net Yield Average Tenure 13 7 15% - 17% 12 – 48 months 2 11 Repeat Customers CIBIL Score 8 7 70% 650+ 21 # Customers (‘000) 3,502 3,390 2,806 2,300 1,600 1,458 1,091 1,0
Slide 14: Rural Finance
Rural Finance Pan India Presence Product Characteristics Digitally led journey throughout sourcing, risk, credit with live collections and monitoring modules. 285 Branches 19 ATS – INR 45,000 Yield – 24% - 25% 19 12 3 10 8 States and 1 UT ` Average Tenure – 24 JLG Product & Individual months loans 8
Slide 15: Intermediate Retail Credit Solution Business
Intermediate Retail Credit Solution Business 15
Slide 16: Lending to Intermediate Retail Partners
Lending to Intermediate Retail Partners Gross Transaction Volume Lending Book 353 Originator Partners 12% AUM CAGR (Mar-21 to Mar-25) INR crore INR crore 4,922 4,709 6,570 6,209 5,449 5,623 5,877 5,556 4,235 Q1FY25 Q1FY26 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Jun-24 Jun-25 Placement + Disbursement + Fu
Slide 17: Strong Fee Volumes
Strong Fee Volumes Northern Arc’s Unique Fee Franchise Fund Management Placements • Managed 12 funds and 3 PMS with successful exit of 6 Funds • Offers structured and syndicate financing for our Originator Partners • 6 Funds + 3 PMS currently active • 200+ investor partners, INR 1 trillion+ of place
Slide 18: Risk Management
Risk Management 18
Slide 19: Robust Risk Management Framework
Robust Risk Management Framework Robust risk management framework based on sector expertise, ground-level insights, extensive data analytics and proprietary risk models Manage organizational risks Using our Suite of Risk Analysis Tools Through Deep Domain Knowledge and Transaction Qualitative Field-
Slide 20: Deep focus on collections
Deep focus on collections Use of Data & Analytics Omni-channel Pro-active monitoring to Legal Cell covering all across Collections payments contain stress relevant laws lifecycle infrastructure Pre-Delinquency X Bucket Initial – Mid Write-off Deep Buckets Management Collection Buckets Recoveries Pre
Slide 21: Sector wise asset quality
Sector wise asset quality Credit Cost (%)2 INR Crores AUM1 GNPA (%) Q1FY26 Intermediate Retail 6,209 0.65% 0.7% MSME 2,687 3.56% 1.8% Includes good book provision of Rs. 19 Cr on account of change in DLG accounting. Excluding Consumer 3,502 0.39% 6.1% that credit cost stands at 4.8% Rural 953 0.13%
Slide 22: Diversified & Granular portfolio resulting in GNPA within desired range
Diversified & Granular portfolio resulting in GNPA within desired range Diversification augmented by proprietary tools and portfolio granularity driving asset quality Sector Diversification Asset Quality Drivers Granular Portfolio • Exposure (in terms of AUM) Proprietary Scorecards for towards Top 1
Slide 23: Portfolio Quality
Portfolio Quality INR ECL % : provision coverage for each Assets under Management Assets under Management (%) ECL : Expected Credit Loss crore/% stage By Jun’24 Sep’24 Dec’24 Mar’25 Jun’25 Jun’24 Sep’24 Dec’24 Mar’25 Jun’25 Jun’24 Sep’24 Dec’24 Mar’25 Jun’25 Jun’24 Sep’24 Dec’24 Mar’25 Jun’25 Stagin
Slide 24: Robust Technology Stack
Robust Technology Stack 24
Slide 25: SaaS Offerings
SaaS Offerings : NuScore nPOS A Machine-Learning-Based Solution to Aid Originators in their Connecting banks & financial institutions through APIs, enabling Underwriting swift data exchange & straight through processing of loans Borrower level assessment along with a detailed analytics report Co-len
Slide 26: Leveraging Technology Stack
Leveraging Technology Stack Lead Generation Customer Onboarding Credit Underwriting Pre-Disbursal Loan Disbursal Loan Servicing • Digital form • OKYC/EKYC PD with customer CAM • E-Nach • Digital disbursal • Customer app summary assessment IMPS/RTGS/NEFT • Feet on Street • PAN verification • E-Sign •
Slide 27: Strong Liability Franchise
Strong Liability Franchise 27
Slide 28: Diversified sources of funding…
Diversified sources of funding… Borrowings Incremental Cost of Funds (1) INR crore 10.5% Increase in Risk Weights for NBFC Exposure in FY24 10.0% 10.2% 250 basis points repo 9.5% rate hike during FY23 9.0% 9.3% 9.2% 8.5% 8.6% 8.8% 8.7% 9,860 9,422 8.0% 9,048 7,035 7.5% 5,983 7.0% 3,932 6.5% 6.0% FY2
Slide 29: …With proactive liquidity management
…With proactive liquidity management Liquidity position INR crore Cash & Bank Balance Undrawn Sanction Consistently adhered to all RBI norms as well as 1,200 1,233 ALCO guidelines clearly reflecting strong Asset Liability position 647 589 564 250 No negative cumulative Jun-24 Mar-25 Jun-25 mis-match
Slide 30: Financials
Financials 30
Slide 31: Strong Operating Parameters
Strong Operating Parameters Portfolio Yields % and Cost of Funds %* 16.8% 16.9% 17.5% 17.2% 17.1% 16.3% 16.2% 14.7% 14.1% 13.9% 10.2% 8.8% 9.2% 9.1% 8.6% 9.3% 9.4% 9.8% 9.0% 8.9% 8.9% 8.3% 6.5% 9.1% 9.1% 8.7% 8.9% 5.6% 8.4% 5.5% FY21 FY22 FY23 FY24 FY25 Q1FY25 Q2FY25 Q3FY25 Q4FY25 Q1FY26 Portfolio y
Slide 32: Sustainable growth in profitability
Sustainable growth in profitability Revenue From Operations * INR crore CAGR 33% 2,071 540 1,685 506 1,190 864 657 FY21 FY22 FY23 FY24 FY25 Q1FY25 Q1FY26 Pre-Provisioning Operating Profit (PPoP) (INR Cr) CAGR 35% 791 207 542 175 360 235 285 FY21 FY22 FY23 FY24 FY25 Q1FY25 Q1FY26 Notes:* Adjusted for
Slide 33: Consolidated Income Statement
Consolidated Income Statement INR crore Q1FY25 Q4FY25 Q1FY26 YoY % QoQ % Interest income1 481 519 513 7% -1% Interest expense 209 198 215 3% 8% Net Interest Income 272 320 298 10% -7% Fee & Other Income 25 30 27 8% -8% Net Revenue 297 350 325 9% -7% Employee Costs 70 68 76 8% 11% Operating Costs 51
Slide 34: Financial Dupont
Financial Dupont Particulars Q1FY25 Q4FY25 Q1FY26 Interest Income* 16.2% 16.2% 15.3% Interest Expense 7.0% 6.2% 6.4% Net Interest Income 9.1% 10.0% 8.9% Fee and Other Income 0.8% 0.9% 0.8% Net Revenue 10.0% 10.9% 9.7% Employee Costs 2.4% 2.1% 2.2% Operating Costs 1.7% 1.6% 1.3% Total Operating Expen
Slide 35: Balance Sheet
Balance Sheet INR crore Jun’24 Mar’25 Jun’25 Assets Financial assets Cash and bank balances 589 647 564 Loans 9,651 10,572 10,349 Investments 1,661 2,052 1,927 Other financial assets 107 144 165 Non-financial assets 125 223 252 Total assets 12,133 13,638 13,257 Liabilities and equity Financial liabi
Slide 36: Strategy
Strategy 36
Slide 37: Strategy for Sustainable growth
Strategy for Sustainable growth Direct to Customer Lending Credit Solutions • Focus on MSME sector with meaningful growth • Harnessing Credit Solution Ecosystem for Intermediate Retail Partners with focus on overall credit enablement through • Leverage Digital & Partnership channels to grow Consumer
Slide 38: Board & Management
Board & Management 38
Slide 39: Board of Directors
Board of Directors : Mr. P S Jayakumar Ms. Anuradha Rao Mr. Ashutosh Arvind Pednekar Mr. Sandeep Dhar Chairman & Non-Executive Non-Executive Non-Executive Non-Executive Independent Director Independent Director Independent Director Independent Director ---------------------------------------- ------
Slide 40: Management
Management : Pardhasaradhi Rallabandi Atul Tibrewal Saurabh Jaywant Group Risk Officer & Governance Chief Financial Officer Chief Legal Officer Head 31+ years of experience in Banking 22+ years of experience in finance 22+ years of experience in Previously associated with Previously associated with
Slide 41: Sustainability
Sustainability 41
Slide 42: ESG Framework
ESG Focused Business Model Positively Impacting 124 Mn+ Lives Robust ESG Framework with Effective Tools & Regular UNSDG(1) Alignment Built into the Business Model Monitoring • Committed to responsible financing framework • Adherence to Leapfrog’s ‘Responsible Investment Code’ Group Level • Adoption
Slide 43: Empowering community through CSR
Empowering community through CSR Education Education Support elementary students in Andhra Pradesh, Karnataka, and Bihar by providing Upgrading rural school infrastructure in Palghar district, Maharashtra. These includes learning and training materials to improve basic literacy and numeracy. solar p
Slide 44: Awards and Accolades
Awards and Accolades ET BFSI - Best Digital Lending India NBFC Summit – Best Lending ET Impactful CEO Award Platform – nPOS NBFC of the Year Deloitte India Tech Fast 50 Hurun India Future Unicorn Award 44
Slide 45: Thank you!
Thank you! For any query, please contact : Atul Tibrewal Chief Financial Officer atul.tibrewal@northernarc.com Chetan Parmar Head Investor Relations chetan.parmar@northernarc.com 45
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