Northern Arc shares hit 52-week high after Q4 profit jump, brokerages positive

Brokerages remained positive on the stock following the earnings performance and improving growth outlook. | Photo Credit: istock.com

Northern Arc Capital shares rallied 12 per cent to hit their 52-week high on Monday after the non-banking financial company reported a nearly three-fold jump in net profit for the March quarter, driven by strong growth in interest income and improvement in asset quality.

The stock traded at ₹312.05 on the NSE at 12.21 pm, hitting a 52-week high of ₹321.70 compared to the previous close of ₹287.30.

Post market hours on Friday, the company posted a net profit of ₹139 crore in Q4FY26 compared with ₹47 crore in the corresponding quarter last year. Total income rose to ₹735 crore during the January-March quarter of FY26 from ₹593 crore a yearago, while net interest income increased 21 per cent y-o-y to ₹387 crore.

Total expenditure stood at ₹552 crore during the quarter compared with ₹545 crore in the year-ago period.

Asset quality improved during the quarter, with gross non-performing asset ratio moderating to 1.2 per cent as of March 31, 2026 from higher levels earlier, while net NPA ratio eased to 0.6 per cent.

Brokerages remained positive on the stock following the earnings performance and improving growth outlook.

DAM Capital said the stock continues to trade at inexpensive valuations of around 0.9x FY28 estimated book value and nearly 7x FY28 estimated earnings. The brokerage expects the company to deliver more than 22 per cent CAGR growth and over 25 per cent earnings growth, supported by return on equity of over 14 per cent by FY28. DAM Capital has a target price of ₹400 on the stock, implying around 40 per cent upside over the next 12 months.

Motilal Oswal reiterated its buy rating with a target price of ₹390, citing healthy growth across key operating parameters in Q4FY26. The brokerage said management remains confident of sustaining growth momentum in FY27, aided by recovery in the microfinance segment and continued traction in MSME and consumer finance businesses.

The brokerage added that the company’s credit solutions business provides a stable fee income stream, while its continued focus on asset quality and prudent risk management positions it well for sustainable long-term growth. Motilal Oswal expects assets under management and profit after tax CAGR of around 21 per cent and 34 per cent respectively over FY26-28.

ICICI Securities maintained its buy rating and raised the target price to ₹370 from ₹340, valuing the stock at 1.35x FY27 estimated book value. The brokerage highlighted regulatory changes related to digital lending and the performance of the rapidly growing MSME loan book as key monitorable risks for the company going forward.

Published on May 11, 2026