Ashish Dhawan portfolio: Shares of Northern Arc Capital Ltd have been on a roll lately as the Ashish Dhawan-backed non-banking financial company (NBFC) has soared as much as 55 per cent in the financial year beginning on April 1, 2026. However, the stock saw some profit booking on Tuesday after the solid rise.

Shares of Northern Arc Capital surged to Rs 321.90 on Monday, with its market capitalization hitting Rs 5,000 crore mark. However, the stock saw some profit booking on Tuesday. The stock has rallied more than 55 per cent from its level around Rs 207 on March 30, 2026. In the last one month, it has posted a 35 per cent gain and it saw a 21 per cent rally in five sessions as of Monday.
 

Northern Arc Capital Q4 results
Northern Arc reported a more than 250 per cent rise in the net profit on a year-on-year (YoY) at Rs 133 crore for the quarter end on March 31, 2026, while its net interest income increased 21 per cent YoY to Rs 387 crore. Lending AUM increased 22 per cent YoY to Rs 16,594 crore, while asset quality also improved on gross and net levels.

Pre-provisioning operating profit rose 17 per cent YoY to Rs 269 crore, while return on equity for Q4FY26 increased to 14 per cent for the reported quarter. Its credit cost stood dropped 383 basis points (bps) to 2.2 per cent, while return on assets improved 217 bps to 3.3 per cent for the reported quarter.
 

What Management said

FY26 was a landmark year. Despite headwinds in the microfinance segment earlier in the year and geopolitical uncertainties toward year -end, we delivered record performance . Our lending AUM crossed Rs 16,500 crore, while annual PAT reached an all-time high, said Ashish Mehrotra , MD & CEO at Northern Arc Capital. We enter FY2027 with a focused approach to drive profitable growth."
 

Northern Arc Capital IPO

Shares of Northern Arc Capital were listed at the bourses in September 2024, when the company raised a total of Rs 777 crore via IPO, selling its shares for Rs 263 apeice. Post listing the stock dropped to Rs 167-mark in March 2025, falling nearly 37 per cent from its IPO price. However, with the latest rebound, the stock is up 93 per cent from its lows.
 

Northern Arc Capital target prices

Earnings beat was entirely driven by a better credit cost. Consequently, credit cost was lower by approximately Rs 43 crore. There was a healthy improvement in 30+ DPD by 55bps. Management has guided for overall AUM growth of 22–25 per cent and credit cost of 2.7–2.8 per cent for FY27, said DAM Capital. It has a 'buy' rating on the stock with a target price of Rs 400.

Northern Arc Capital reported a strong set of numbers with AUM growth was strong at 10 per cent QoQ and ending the year with 22 per cent growth. For FY27, management has guided for AUM growth at 3 times of real GDP, which would be in the range of 22-25 per cent, said ICICI Securities.

"Its recent strategic shift towards D2C lending could help granularise its balance sheet and generate better risk-adjusted returns across credit cycles. We see RoA reaching 3 per cent over FY27E/FY28E, aided by 22 per cent AUM CAGR over FY26–28E. This shall translate into RoE of 13 per cent/14 per cent for FY27E/FY28E," it added with a 'buy' rating and revised target price of Rs 370.

NACL delivered a strong 4QFY26 performance, supported by healthy growth across all key operating parameters. Management remains confident of sustaining this momentum in FY27, aided by the recovery in the MFI segment and continued strong growth in the MSME and consumer finance businesses, said Motilal Oswal Financial Services.

"The credit solutions business, which provides a steady fee income stream, along with a continued focus on asset quality and prudent risk management, places NACL on a strong footing to deliver sustainable long-term growth, it added and reiterated 'buy' rating on the stock with a target price of Rs 390, based on 1.2x FY28E P/BV," it added.