Northern ARC Capital Faces Profitability Challenges Amid Record Net Sales Performance

Northern ARC Capital, a small-cap player in the Non-Banking Financial Company (NBFC) sector, has recently undergone a financial trend adjustment reflecting its performance in the quarter ending March 2025. The company reported its highest net sales for the quarter at Rs 602.52 crore. However, this positive aspect is overshadowed by significant declines in other key financial metrics.
The profit after tax (PAT) for the quarter fell sharply to Rs 37.76 crore, marking a 57.5% decrease compared to the previous four-quarter average. Additionally, the company recorded its lowest PBDIT at Rs 236.31 crore and an operating profit to net sales ratio of just 39.22%, indicating challenges in maintaining profitability. The profit before tax, excluding other income, also hit a low of Rs 30.81 crore, while earnings per share (EPS) dropped to Rs 2.34.

In terms of market performance, Northern ARC's stock has shown mixed results compared to the Sensex. Over the past week, the stock returned -1.69%, while it has seen a modest gain of 4.94% over the past month. However, year-to-date performance reveals a decline of 3.68%, contrasting with the Sensex's 3.90% gain. These trends highlight the challenges Northern ARC faces in navigating a competitive financial landscape.