Hero FinCorp: Financial & Operational Performance (FY26 vs FY25)

04 June 2026

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• Financial Performance (FY26 vs FY25): Hero FinCorp Limited reported steady financial growth during FY26, supported by continued expansion in its retail lending portfolio across vehicle finance, personal loans, MSME lending, and consumer finance segments. Total income increased to approximately ₹9,733 crore in FY26 from around ₹9,123 crore in FY25, reflecting growth in interest income and lending activities. Net interest income remained healthy, supported by a growing loan portfolio and stable yields. Profit Before Tax (PBT) improved to approximately ₹249 crore in FY26 compared to around ₹214 crore in FY25. Profit After Tax (PAT) increased to approximately ₹164 crore from around ₹146 crore in FY25, reflecting improved profitability despite elevated funding costs and provisioning requirements. The company's earnings growth was driven by business expansion, operating efficiency, and disciplined risk management.
• Operational Metrics (FY26 vs FY25): Operationally, Hero FinCorp continued to strengthen its position as one of India's leading retail-focused NBFCs. The company's loan portfolio expanded to approximately ₹53,423 crore in FY26 compared to around ₹47,731 crore in FY25, reflecting strong credit demand across vehicle finance, personal loans, and MSME lending segments. Total assets increased to approximately ₹60,192 crore from ₹54,714 crore in FY25, supported by sustained loan growth and improved business scale. Finance costs increased to approximately ₹3,308 crore compared to ₹3,401 crore in FY25, while impairment on financial instruments stood at around ₹2,494 crore. Asset quality remained stable with prudent provisioning coverage and controlled credit costs. The company maintained a diversified funding profile through bank borrowings, market instruments, securitization transactions, and debt capital markets, supporting long-term balance sheet growth.
• Key Ratios (FY26): Valuation and profitability indicators remained healthy during FY26. The company's Price-to-Book (P/B) Ratio stood at approximately 2.23x. Asset quality remained stable with Gross NPA at 4.23% and Net NPA at 1.79%, reflecting effective risk management despite operating in a large retail lending environment. The company maintained a healthy Net Interest Margin (NIM) of approximately 8.00%. Capitalization remained robust, with a Capital Adequacy Ratio (CAR/CRAR) of 16.8%, comfortably above regulatory requirements. Profitability metrics remained healthy with Return on Assets (ROA) of approximately 0.27% and Return on Risk-Weighted Assets (RORWA) of approximately 0.47%. These metrics highlight Hero FinCorp's strong balance sheet, resilient asset quality, adequate capitalization, and ability to generate sustainable earnings while maintaining prudent risk controls.
• Strategic Developments & Outlook: Hero FinCorp continues to leverage the strong ecosystem of the Hero Group while expanding its presence across retail lending, MSME finance, consumer loans, and digital lending platforms. The company remains focused on enhancing customer acquisition through technology-driven distribution channels, strengthening collections infrastructure, and improving operational efficiency. During FY26, Hero FinCorp maintained a strong liquidity profile and diversified funding base, supporting future growth initiatives. The company also continued investing in digital capabilities and analytics-led underwriting to improve customer experience and risk management. Looking ahead, Hero FinCorp is expected to benefit from increasing retail credit penetration, rising consumer spending, growing vehicle financing demand, and continued formalization of the MSME sector. While funding costs and credit costs may remain key monitoring factors, the company's scale, diversified product portfolio, strong parentage, and disciplined risk management framework are expected to support stable long-term growth and profitability.