Tata Capital Q2 FY27: consolidated PAT +64% YoY to ₹1,832 Cr on margin, cost-ratio gains

Tata Capital's consolidated PAT rose 63.7% YoY to ₹1,831.88 Cr (vs ₹1,118.97 Cr) and 12.5% QoQ (vs ₹1,628.18 Cr) in Q2 FY27, on revenue from operations of ₹9,341.81 Cr, up 20.7% YoY. The headline growth is flattered by a ₹186.32 Cr one-off gain booked within revenue on the derecognition of an associate (Linux Laboratories ceased to be an associate effective September 28, 2026); stripping that out, adjusted consolidated PAT growth is closer to +51% YoY — still well ahead of the 20.7% revenue growth, pointing to genuine operating leverage rather than a one-off-driven print. Standalone PAT, unaffected by the associate item, grew a clean 73.1% YoY to ₹1,143.26 Cr, underscoring a divergence between the parent's core lending profitability and the slower consolidated growth after non-controlling interest and the associate gain base effect. The margin story is the more durable part of this quarter: net profit margin (PAT/revenue from operations) expanded to 19.6% from 14.4% a year ago and 18.5% last quarter, and the cost-to-income ratio — opex (employee cost + depreciation + other expenses) over net income (total income less finance cost) — fell to roughly 33.9% from ~39.7% in Q2 FY26 and ~36.4% in Q1 FY27 (this formula reproduces management's own 36.4% figure for Q1 almost exactly). That puts the company already inside the 33-34% band management had guided as an FY28 target as of the last concall, roughly two years ahead of schedule. Combined employee, depreciation and other opex grew only ~5.9% YoY to ₹1,585.04 Cr against 20%+ income growth — the clearest driver of the margin gain. Non-controlling interest's share of consolidated PAT jumped to ₹172.01 Cr from ₹21.65 Cr a year ago, roughly an 8x increase, which is the main reason owners' PAT (₹1,659.87 Cr, +51.3% YoY) and total consolidated PAT grew slower than the standalone print. Management's prior guidance (Q1 FY27 concall) called for FY27 AUM growth of 23-25%, margins improving ~10 bps despite an 8-10 bps rise in cost of funds, credit costs around 1%, and cost-to-income narrowing to 33-34% by FY28. This filing does not break out AUM, so the 23-25% target cannot be verified directly from these numbers, but on every metric the filing does disclose, the quarter runs ahead of the guided pace: margin expansion is well above the guided 10 bps, and cost-to-income has already reached the FY28 target band. Credit costs, estimated from impairment of ₹773.17 Cr annualised against the loan book, work out to roughly 1.1%, broadly in line with the ~1% guidance. No Q2 FY27-specific Street consensus for PAT was found in a search; brokerage notes published around the Q1 FY27 print had pointed to an FY26-28E PAT CAGR of roughly 35%, against which this quarter's adjusted ~51% YoY growth runs ahead. Corporate actions this quarter include the board's approval, alongside results, to enhance the medium-term note programme to USD 3 billion from USD 2 billion for potential offshore bond issuance, a change in Treasury leadership (Mandar Joshi replacing the retiring Kiran Joshi), and a pending agreement (announced July 13, 2026, regulatory approvals awaited) to acquire an 88.6% stake in Yogakshemang Loans, the company's entry into gold loans. Going into Q3 FY27, the key markers are whether the 23-25% AUM growth guidance holds once the company next discloses the metric, whether the ~33.9% cost-to-income ratio sustains or eases back, and the regulatory progress and consolidation impact of the Yogakshemang Loans gold-loan acquisition once approvals come through.