Finova Capital's FY26 Profit Drops 11% Amid Revenue Growth
India-based lending tech firm Finova Capital reported an 11% year-on-year decline in net profit for fiscal year 2026 to ₹165.3 crore, despite a 21% rise in operating revenue. The company cited challenging market conditions.
Finova Capital, a lending technology startup backed by Norwest Ventures and Peak XV Partners, saw its net profit fall by 11% to ₹165.3 crore in fiscal year 2026, down from ₹185 crore in the previous fiscal. However, operating revenue increased by 21% to ₹921.4 crore, compared to ₹762.3 crore in FY25.
The company's loan disbursements decreased by 17% to ₹1,161.9 crore in FY26, while its gross assets under management (AUM) grew by 10% to ₹3,827.8 crore. Finova Capital also experienced a slight increase in gross and net non-performing assets (NPAs), reflecting broader industry challenges in asset quality.
Finova Capital attributed the profit moderation to a challenging macro-environment and market conditions in the retail and MSME lending sectors. The company stated it consciously prioritized asset quality, prudent provisioning, and portfolio resilience over short-term profitability, supported by disciplined underwriting and calibrated credit growth.
Looking ahead to improve profitability and reduce credit costs, Finova Capital is focusing on enhancing asset quality. The startup has undertaken measures such as restructuring its operational framework to separate sales and risk verticals, and revamping its collections function. The company is also leveraging technology, including AI solutions for collections strategy automation and machine learning-based predictive models for collections.