1 week ago
Auto NBFC Disbursements Rise 20.7% as Lending Diversifies
Auto finance companies lend money to people and businesses to buy vehicles and other assets.
In the first quarter of FY27, they lent 20.7% more money than in the same quarter last year.
However, lending was 4.6% lower than in the previous quarter.
This happened partly because many buyers purchased commercial vehicles early in the previous quarter.
Demand for passenger vehicles and tractors remained strong.
The companies also began lending more for products such as gold loans, home loans and small-business loans.
This helped reduce their dependence on commercial vehicle financing.
Their profits and overall managed assets both grew strongly during the quarter.
Auto finance NBFC disbursements rose 20.7% year-on-year to ₹1.04 lakh crore in Q1FY27.
Disbursements declined 4.6% quarter-on-quarter as commercial vehicle volumes normalised after Q4FY26 pre-buying.
Sector assets under management grew approximately 17% year-on-year, while pre-provision operating profit increased 35.7% to ₹11,771 crore.
Profit after tax surged 53.4% year-on-year to approximately ₹6,519 crore, despite a seasonal monsoon-related asset-quality deterioration.
Lenders expanded into SME and loan-against-property finance, gold loans, construction equipment, personal loans and home loans.
- Who
- Auto finance non-banking financial companies, including Cholamandalam, Shriram Finance, Mahindra Finance and Sundaram Finance.
- What
- Disbursements increased 20.7% year-on-year to ₹1.04 lakh crore in Q1FY27, while sector profitability and assets under management also grew.
- Where
- When
- During Q1FY27; the report was published on August 22, 2026.
- Why
- Growth was supported by GST rate-cut benefits, resilient passenger-vehicle and tractor demand, and diversification into non-commercial-vehicle lending.
Key facts
- Q1FY27 disbursements
- ₹1.04 lakh crore
- Year-on-year disbursement growth
- 20.7%
- Quarter-on-quarter disbursement change
- Down 4.6%
- Sector AUM growth
- Approximately 17% year-on-year
- Pre-provision operating profit
- ₹11,771 crore, up 35.7% year-on-year
- Profit after tax
- Approximately ₹6,519 crore, up 53.4% year-on-year
- Sundaram Finance overall disbursements
- Up 11.1% quarter-on-quarter
Quotes
Centrum report
Research report covering the performance and outlook of auto-finance NBFCs
“The more durable story this quarter was diversification: SME/LAP, gold loans, construction equipment, personal loans and home loans continued to gain share across balance sheets, a deliberate strategy by most lenders to reduce dependence on the vehicle cycle and smooth earnings through periods exactly like this one.”
thehindubusinessline.com
Sources
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