Hero FinCorp Q3FY26: Losses Expand Amid Credit Cost Pressure
Hero FinCorp’s Q3FY26 numbers reflect continued stress on profitability, mainly due to high credit costs and elevated finance expenses. The company reported a year-on-year decline in income and a wider net loss compared to the same quarter last year.
Total income for the quarter stood at ₹2,160.05 crore, lower than ₹2,306.4 crore in Q3FY25. The fall was largely due to moderation in interest income, which came in at ₹1,837.6 crore. In a tight interest rate environment, lending yields remained under pressure, affecting overall earnings.
The sharp increase in impairment charges had the biggest impact. Provisions on financial instruments rose significantly to ₹604.5 crore. At the same time, finance costs remained high at ₹807.01 crore. As a result, the company reported a pre-tax loss of ₹103 crore, compared to a loss of ₹11.9 crore a year ago. Net loss widened to ₹121.7 crore, and earnings per share declined further into negative territory.
For the first nine months of FY26, the trend has been similar. Total income stood at ₹6,634.13 crore, slightly lower on a yearly basis. However, the company moved into a net loss of ₹284.2 crore, compared to a profit in the corresponding period last year. This shows that profitability pressure has continued through the financial year.
On the asset quality side, Gross NPA rose to 5.89%, while Net NPA increased to 2.67%. Stress remains visible in MSME and unsecured loan segments. However, the Provision Coverage Ratio improved to 58.42%, which strengthens the company’s ability to absorb potential losses.
Capital and liquidity indicators offer some comfort. The capital adequacy ratio stood at 17.29%, and the liquidity coverage ratio improved to 153.8%. Net worth also increased to ₹5,812.4 crore. These factors suggest that while earnings are under strain, the balance sheet remains stable.
During the quarter, the company raised ₹500 crore through NCDs to manage liquidity and refinancing requirements. It also continued efforts to rebalance the portfolio by acquiring selective loan pools and transferring stressed assets.
In the unlisted market, the Hero Fincorp Share Price may respond to these developments as investors evaluate asset quality trends and the company’s path toward recovery.
Overall, Q3FY26 highlights ongoing pressure from credit costs and funding expenses. The coming quarters will be important to see whether asset quality stabilises and whether provisioning levels start to ease.
