Motilal Oswal Initiates Coverage on Northern Arc Capital with a Target Price of Rs 360
Northern Arc Capital Research Report
Company Overview
Northern Arc Capital (NACL), a technology-driven financial services company, has established a diversified ecosystem catering to the credit needs of underserved households and businesses across India. Founded in 2009, NACL has facilitated approximately INR 2 trillion of financing and built a strong pan-India presence.
Key Statistics
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- 368 branches and 55 digital partners across India
- 357 originator partners and 1,400+ investor relationships
- INR 151 billion in lending Assets Under Management (AUM) as of December 2025
Business Model
NACL has developed end-to-end in-house capabilities, creating a holistic ecosystem for borrowers, originators, and investors. The company's diversified fee income and risk management capabilities are expected to aid in Return on Assets (RoA) expansion.
Investment Thesis
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We initiate coverage on Northern Arc Capital with a BUY rating and a Target Price (TP) of INR 360, based on 1.2x FY28E Price-to-Book Value (P/BV). This reflects confidence in the sustainability of its Direct-to-Consumer (D2C)-led growth, improving profitability, and disciplined risk management.
Investor Takeaway
Investors should consider Northern Arc Capital for long-term growth opportunities.
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