Profit grows 41.36% as Northern Arc's margin narrows again
Revenue rose 41.56% YoY, but expenses grew faster and pushed operating margin down 1.97 percentage points.
Filed 03 Nov 2026, 17:17 IST · after market close · Northern Arc Capital Ltd (NORTHARC)
Key takeaways
- Standalone net profit rose +41.36% YoY to Rs 133.98 cr, but expenses grew faster than revenue at +47.84% versus +41.56%.
- Operating margin narrowed by 1.97 percentage points YoY to 53.48%, marking a second consecutive quarterly decline.
- Standalone operating margin was 1.93 percentage points above the 51.55% median for 73 reported Financial Services peers.
Price around the results
Profit growth stayed ahead of revenue momentum
Standalone revenue increased +41.56% YoY and +11.83% QoQ, lifting operating profit by +36.52% YoY and +8.88% QoQ. Net profit rose +41.36% YoY to Rs 133.98 cr and +10.00% QoQ, while EPS increased to Rs 8.29 from Rs 5.87 a year earlier. Other income contributed 2.28% of pre-tax profit, so it was not a major driver of earnings.
Faster cost growth continued to pressure margins
Expenses grew +47.84% YoY against revenue growth of +41.56%, narrowing operating margin by 1.97 percentage points. The same pattern appeared sequentially, with expenses up +15.41% versus revenue up +11.83%, reducing margin by 1.44 percentage points. Interest expense increased +35.39% YoY and +7.99% QoQ, while the tax rate rose by 0.32 percentage points YoY and 0.65 percentage points QoQ.
Margin remains above peers despite two-quarter decline
Operating margin has declined from 55.45% in Q2FY26 to 54.92% in Q1FY27 and 53.48% in Q2FY27, making this the second consecutive quarterly fall. Even so, Northern Arc's margin was 1.93 percentage points above the 51.55% median among 73 Financial Services peers that had reported the quarter.
Presentation highlights underwriting and collections platforms
The presentation describes nPOS as a dominant player in the securitization and PTC-enabled platform. Management said the company uses proprietary machine-learning underwriting models, while its NuScore platform uses machine-learning and artificial-intelligence-based credit scorecards. Management also described a multi-tiered digital collections architecture using digital communications, dialers and agentic bots.
Filing came after the market close
The results were filed after market close on 3 November 2026. No market reaction is covered in this note.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹858 cr | ₹768 cr | +11.83% | +41.56% |
| Other income | ₹4 cr | ₹3 cr | +52.22% | +236.89% |
| Expenses | ₹399 cr | ₹346 cr | +15.41% | +47.84% |
| Operating profit | ₹459 cr | ₹422 cr | +8.88% | +36.52% |
| Operating margin (%) | 53.48% | 54.92% | — | — |
| Interest | ₹279 cr | ₹258 cr | +7.99% | +35.39% |
| Depreciation | ₹4 cr | ₹3 cr | +11.49% | -12.22% |
| Profit before tax | ₹181 cr | ₹163 cr | +10.95% | +41.97% |
| Tax | ₹47 cr | ₹41 cr | +13.79% | +43.74% |
| Net profit | ₹134 cr | ₹122 cr | +10.00% | +41.36% |
| EPS (₹) | ₹8.29 | ₹7.54 | +9.95% | +41.23% |
Operating margin of 53.48% compares with a Financial Services sector median of 51.55% across 73 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
New initiatives
- The company uses proprietary underwriting models built using machine-learning techniques.
- The company has an intelligent, multi-tiered, digital collections architecture using digital communications, dialers and agentic bots.
- The NuScore platform uses machine-learning and artificial-intelligence-based credit scorecards.
Competition
- The company describes nPOS as a dominant player in the securitization/PTC-enabled platform.
What to watch
- Whether operating margin holds above 53.48% after two consecutive quarterly declines.
- Whether expenses grow slower than revenue after rising +47.84% YoY versus revenue growth of +41.56%.
- Whether interest growth moderates from +35.39% YoY.