Tata capital in financial ratios
For Tata Capital, the most relevant view is as an NBFC (lending business), so the key financial ratios are around asset quality, profitability, capital adequacy and liquidity.
Key financial ratios – Tata Capital Limited (consolidated, FY 2023‑24, year ended 31 March 2024)
(as per latest available annual report)
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| Ratio | FY 2023‑24 | How to interpret (for an NBFC) |
|---|---|---|
| Return on Equity (RoE) | ~17.6% | Profitability for shareholders; high for a large diversified NBFC. |
| Return on Assets (RoA) | ~2.4% | Profit per rupee of assets; 2%+ is considered strong for lenders. |
| Gross NPA (GNPA) | ~1.5% | Overall stressed loans; among the lowest in the NBFC sector. |
| Net NPA (NNPA) | ~0.4% | Stressed loans after provisions; indicates strong provisioning. |
| Provision Coverage Ratio | ~74% | Provisions as % of GNPA; higher coverage = more conservative. |
| Credit Cost | ~0.5% | Loan‑loss charges vs loan book; very low, supports profitability. |
| Capital to Risk‑Weighted Assets Ratio (CRAR) | ~16.7% (Tier I ~11.9%, Tier II ~4.9%) | Regulatory capital buffer; comfortably above RBI minimum (15%). |
| Liquidity Coverage Ratio (LCR) | ~112% | High‑quality liquid assets vs 30‑day net outflows; >100% is comfortable. |
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These figures come from Tata Capital’s FY 2023‑24 Annual Report disclosures on performance highlights, asset quality, RoA/RoE, and regulatory ratios like CRAR and LCR. (tatacapital.com)
How to use these ratios when analysing Tata Capital (or any large NBFC):
1. Asset quality
- GNPA, NNPA, provision coverage, and credit cost together show how clean the book is and how conservatively it is provided for.
- For Tata Capital, low GNPA/NNPA and high coverage support the “best‑in‑class asset quality” management commentary. (tatacapital.com)
2. Profitability
- RoA and RoE tell you if growth is profitable or just balance‑sheet expansion.
- A RoA above ~2% and RoE mid‑teens suggest efficient use of capital and decent pricing power. (tatacapital.com)
3. Capital & leverage
- CRAR (and Tier I within it) show headroom to grow the loan book without breaching RBI norms.
- Tata Capital’s CRAR of ~16.7% is above the 15% regulatory floor for NBFC‑UL, indicating comfortable capitalisation. (tatacapital.com)
4. Liquidity
- LCR above 100% means near‑term obligations are well covered by liquid assets, important for any large NBFC funding itself largely via market borrowings. (tatacapital.com)
5. Growth context (not a ratio but relevant)
- FY24 loan book around ₹1.58 lakh crore with ~35% YoY growth and PAT ~₹3,150 crore explain why profitability ratios are strong despite rapid growth. (tatacapital.com)
For deeper analysis, you would typically track these ratios year‑on‑year and vs peer NBFCs (Bajaj Finance, HDFC Ltd pre‑merger, L&T Finance, etc.) rather than in isolation.
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