Hero FinCorp, the NBFC arm of the Hero group, released its financials for the nine months ended December 2025. At first glance, the story looks mixed — stable lending performance, steady margins, but profitability remains under pressure. Let’s break it down.
Hero FinCorp’s interest income stood at ₹5,677 crore for 9M FY26, slightly lower than ₹5,922 crore in 9M FY25.
Meanwhile, interest costs remained largely flat at ₹2,553 crore.
👉 Result? Net Interest Income (NII) came in at ₹3,124 crore, down from ₹3,398 crore last year.
Despite the dip in absolute NII, margins held up.
NIM improved marginally to 12.7% (vs 12.5% last year)
This suggests pricing discipline and better yield management, even in a competitive credit environment.
Hero FinCorp’s advances declined to ₹44,753 crore, compared to ₹47,544 crore in 9M FY25.
This indicates:
A cautious stance on disbursements
Possible tightening in underwriting
Focus on portfolio quality over aggressive growth
For an NBFC, this is often a defensive move during uncertain credit cycles.
Non‑interest revenue provided some cushion:
Insurance income: ₹149 crore (stable YoY)
Gains on financial instruments: jumped to ₹153 crore (from ₹59 crore)
Other charges: ₹596 crore (slightly lower YoY)
Together, this helped total revenue from operations reach ₹6,629 crore, though still lower than last year’s ₹6,805 crore.
Operating expenses rose to ₹1,905 crore, reflecting scale costs and inflationary pressures.
But the bigger hit came from provisions, which stayed elevated at ₹1,990 crore.
👉 This is the single biggest reason Hero FinCorp slipped into losses.
PAT for 9M FY26: –₹284 crore
PAT margin: –4.3%
Compare this to:
₹34 crore profit in 9M FY25
₹58 crore profit for full FY25
In short: operating performance is stable, but credit costs are eating into profits.
GNPA: 5.28% (above the 5% comfort threshold)
NNPA: 2.31%
Asset quality has remained elevated, with GNPA staying above 5%. This indicates continued pressure in collecting loans disbursed by Hero FinCorp and explains why provisioning levels remain high. Until asset quality improves meaningfully, profitability is likely to stay under stress.
Hero FinCorp’s 9M FY26 numbers tell a clear story:
Core lending margins are intact
Growth has been deliberately slowed
Asset Quality is weak as NPAs are still above 5%..
Profitability will depend on how fast provisions normalize
This isn’t a growth story right now — it’s a stability and cleanup phase.
If credit costs ease and loan growth resumes without sacrificing quality, Hero FinCorp could swing back into profitability quickly. Until then, the balance sheet — not the P&L — is where the real story lies.