Dar Credit & Capital Ltd.: A Deep Dive into Q3 & 9M FY26 Performance

Dar Credit & Capital Limited, a seasoned non-banking financial company (NBFC) with over three decades of lending experience, has reported a robust financial performance for the third quarter and nine months ended December 31, 2025. Headquartered in Kolkata, the company has strategically positioned itself in the retail and MSME lending segments, combining analytics-driven credit appraisal with technology-enabled origination and collections. This quarter's results underscore the company's disciplined approach to credit underwriting, operational efficiency, and unwavering focus on profitability without compromising asset quality.

For Q3 FY26, Dar Credit & Capital recorded a total income of INR12.61 crore, leading to a profit before tax (PBT) of INR3.55 crore and a net profit (PAT) of INR2.52 crore. The company's quarterly earning per share (EPS) stood at 1.77, and notably, the PAT margin expanded to 20%, marking its highest in the last five quarters. This reflects significant improvements in leverage and cost discipline. Over the nine-month period ended December 2025, the company's total income reached INR35.62 crore, with PBT at INR8.71 crore and PAT at INR7.04 crore. The nine-month PAT has already surpassed 85% of the full-year FY25 PAT, strongly positioning the company to deliver record annual profitability.

Strategic Focus and Loan Portfolio Dynamics

Dar Credit & Capital's success is largely attributed to its strategic focus on niche product segments: personal loans to municipal employees and secured MSME loans. These segments have demonstrated phenomenal growth and sustainability, characterized by minimal NPA percentages and strong collection efficiency. The company's loan portfolio for 9M FY26 highlights this focus:

The company's total asset size has crossed INR265 crore, with the total loan book, including managed books, reaching INR213 crore. The Gross Non-Performing Assets (GNPA) stood at a healthy 1.5% as of December 2025, with Net Non-Performing Assets (NNPA) at less than 1% (0.96%). This robust asset quality is a testament to their rigorous underwriting process, which combines digital scoring with manual intervention and thorough KYC verification.

Capitalization, Funding, and Geographical Expansion

Dar Credit & Capital is exceptionally well-capitalized, boasting a Capital Adequacy Ratio (CAR) of 43.84% against the regulatory requirement of 15%. This provides significant headroom for sustainable growth without immediate plans for equity fundraising. The company's total borrowing stands at INR159.34 crore, with a net worth of INR100.76 crore. To support its expansion, the company is actively issuing bonds (NCDs) and tapping Public Sector Undertaking (PSU) banks and other large NBFCs. The introduction of NCDs with coupon rates of 12-12.5% has helped reduce the overall cost of borrowings, which was approximately 13% previously.

The company operates across 6 states: West Bengal, Rajasthan, Bihar, Jharkhand, Madhya Pradesh, and Gujarat, with 35 branches and camps across 68 districts. Strategic expansion is planned for Bihar, Jharkhand, and Rajasthan, particularly for the MSME business, to further boost its loan book and market presence.

Technology and Risk Management

Technology plays a pivotal role in Dar Credit & Capital's operations. The company utilizes an in-house designed software, 'Vijay,' developed by Qbent Technologies Pvt. Ltd., for its Loan Origination System (LOS), Loan Management System (LMS), and accounting for Micro and MSME loans. For personal loans, it employs 'RISEMONEY,' a cloud-based software developed by RISINGSUNTECH. These systems enable centralized control, real-time access to loan management, and seamless operations across all branches, ensuring transparency and efficiency.

In terms of risk management, the company emphasizes a blend of digital and personal touch. Its underwriting process involves a scoring approach with digital tools, complemented by manual intervention and thorough income assessment. This hybrid approach, coupled with a focus on secured lending and municipal employee loans, mitigates risk effectively. Management believes that the personal touch in borrower relationships is a key factor in maintaining high collection rates and low NPA rates.

Outlook and Management Guidance

Looking ahead, Dar Credit & Capital is optimistic about its growth trajectory. The management expects the Assets Under Management (AUM) to close FY26 at around INR230-235 crore and project it to cross INR300 crore by FY27. The company anticipates adding approximately INR100 crore in borrowing to support this growth. The optimal product mix is projected to be around 35-40% secured loans, 30% unsecured loans, and 35% personal loans. The company also maintains an average disbursement plan of INR14-15 crore per month.

With a strong capital base, a focused product strategy, and ongoing digital transformation, Dar Credit & Capital is well-positioned to capitalize on the growth opportunities in India's underserved lending markets. The management's commitment to disciplined growth and asset quality instills confidence in its future performance.