Dar Credit & Capital: Navigating Growth with Prudence in H1 FY26

Dar Credit & Capital Limited (DCCL), an Indian Non-Banking Financial Company (NBFC), has showcased a robust financial and operational performance for the quarter and half-year ended September 30, 2025. The company's latest results highlight sustained growth momentum, prudent underwriting practices, and an unwavering focus on operational efficiency, reinforcing its commitment to financial inclusion through responsible lending.

For Q2 FY26, DCCL reported total revenues of ₹11.90 crore, with a net profit (PAT) of ₹2.50 crore. This represents a significant year-on-year growth in profitability, underscoring the effectiveness of its business model. The half-year results for H1 FY26 further solidify this positive trend, with total income reaching ₹23.01 crore and a net profit of ₹4.52 crore. The company's Assets Under Management (AUM) stood at ₹198.10 crore for H1 FY26, reflecting a healthy expansion of its loan book.

Financial Snapshot: Q2 FY26 & H1 FY26

Note: All figures in Crore. EBITDA for Q2 FY25 was 1.6188 Crore, not 161.88 Lakhs as in the table. The press release mentions Q2 FY26 Operating Profit as ₹3.10 crore, which differs from the P&L's EBITDA of ₹8.011 crore.

Strategic Thrusts and Operational Excellence

DCCL's business model is built on a diversified portfolio, including personal loans to municipal employees, secured and unsecured MSME loans, and a growing managed portfolio through business correspondent (BC) partnerships. The personal loan segment for municipal employees stands out for its exceptional asset quality, with virtually zero bad debt due to direct EMI deductions from salaries. This unique positioning provides a stable revenue stream and mitigates credit risk significantly.

Geographical expansion is a key strategic pillar, with DCCL present in 7 states and operating 36 branches. The company recently marked its entry into South India by inaugurating its first branch in Miryalaguda, Telangana, with plans to expand to 42 branches by FY26. This expansion is complemented by a strong focus on digital transformation, leveraging AI and ML for credit assessment, digital loan origination, and automated KYC processes. These technological advancements aim to enhance efficiency, improve customer service, and expand financial access to underserved segments.

Partnerships and Future Outlook

New BC partnerships are proving instrumental in DCCL's growth trajectory. Unsecured MSME Loans with Kaleidofin Capital Limited became operational in August 2025, and Secured MSME Loans with Kisan Dhan Capital Limited went live in September 2025. These partnerships are expected to significantly boost disbursement volumes, with management guiding for monthly disbursements of ₹1 crore from Kaleidofin and ₹0.5 crore from Kisan Dhan in Q3 FY26, further scaling in Q4 FY26. The AUM from BC partnerships is projected to reach ₹30-40 crore by end of FY26 and ₹80 crore by FY27.

Management has provided optimistic guidance, targeting a net profit of ₹18-20 crore by FY27 and an AUM of ₹250 crore for FY26. The company's Gross NPA remains low at 1.29% as of September 2025, reflecting robust risk management. DCCL's strong liquidity position, maintaining cash and equivalents for two months of repayment obligations, further underpins its financial stability. The board's decision to declare an interim dividend of 5% for FY26 continues its six-year track record of consistent shareholder returns.

Sustained Growth and Disciplined Execution

Dar Credit & Capital Limited's H1 FY26 performance demonstrates a clear path of sustained growth, driven by a well-defined strategy, disciplined execution, and a deep understanding of its target markets. The company's ability to maintain strong asset quality, expand its reach, and embrace digital innovation positions it favorably for continued success in the evolving Indian financial landscape. With a focus on both profitability and financial inclusion, DCCL is building a resilient and impactful business for its stakeholders.