Results · Financial Services

Finova Capital profit falls 11% in FY26

By Startup Enthusiast · 15 July 2026

What they do

Finova Capital provides business and home loans to the unorganised sector in semi-urban and rural India

Its FY26 net profit dropped 11% to ₹165.3 crore despite a 21% rise in operating revenue to ₹921.4 crore

Rising bad loans (gross NPAs at 3.22%) and a tripling of impairment costs to ₹126.1 crore hurt profitability

Finova Capital reported a net profit of ₹165.3 crore for FY26, down 11% from the previous year.
Operating revenue rose 21% to ₹921.4 crore, driven by interest income of ₹901.7 crore.
Loan disbursements fell 17% to ₹1,161.9 crore, while gross assets under management grew 10% to ₹3,827.8 crore.
Gross non-performing assets (NPAs) increased to 3.22% from 2.39%, and net NPAs rose to 1.94% from 1.41%.
Total expenditure jumped to nearly ₹700 crore from ₹513.8 crore, with impairment on financial instruments tripling to ₹126.1 crore.
The company blamed a challenging macro environment and conditions in the retail and MSME lending sector for the profit moderation.
It said it prioritised asset quality and prudent provisioning over short-term profitability.

NBFCs across India are facing asset quality challenges, especially in unsecured segments like microfinance, personal loans, and SME loans.
Finova Capital expects continued pressure on asset quality in FY27 but hopes lower credit costs will improve profitability.
The company has restructured its operations, separating sales and risk verticals, revamped collections, and adopted a micro-market-focused approach.

Finova Capital is a middle-layer non-banking financial company (NBFC) founded in 2015.
It offers MSME business loans and home loans, focusing on the unorganised sector in semi-urban and rural areas.
The company operates over 450 branches across 16 states, including Delhi NCR, Rajasthan, Haryana, Punjab, and Uttar Pradesh.
It has raised over $270 million in equity and debt from investors including Faering Capital, Avaatar Venture Partners, Peak XV Partners, and Sofina.
Cofounder Mohit Sahney holds 38% equity, Peak XV owns 20%, and Norwest holds 14%.

Expects pressure on asset quality in FY27 but hopes lower credit costs will improve profitability.
Is implementing AI for collections strategy automation, ML predictive models, and multilingual voice AI.
Has restructured operations to separate sales and risk verticals and revamped collections processes.