Tata Capital Aims for 23-25% Loan Growth Through FY28, Emphasizes Generative AI and Risk Management
Tata Capital targets 23–25% loan growth through FY28, bets on GenAI and falling credit costs to boost returns
The Economic Times
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Tata Capital, led by Managing Director Rajiv Sabharwal, targets 23-25% loan growth through FY28, bolstered by declining credit costs and the integration of generative AI. The company aims to enhance margins and operating efficiency while maintaining robust credit quality, with expectations of credit costs remaining below 1%.
- 01Tata Capital projects loan growth of 23-25% through FY28.
- 02Credit costs have significantly decreased, with a target of below 1%.
- 03Generative AI is being increasingly utilized to improve operational efficiency.
- 04The retail and SME sectors comprise 86% of Tata Capital's total lending.
- 05The company remains vigilant regarding potential risks in MSME and commercial vehicle segments.
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Tata Capital is optimistic about its performance as it heads into FY27, projecting a 23-25% growth in its loan book through FY28. Rajiv Sabharwal, the Managing Director and CEO, highlighted the company's focus on improving margins and operating efficiency, supported by a disciplined risk culture and the integration of generative AI. The company has successfully reduced credit costs, now targeting below 1%, thanks to a robust risk management strategy and effective use of data analytics. In FY26, excluding its motor finance business, Tata Capital achieved a remarkable 28% growth in its loan book, with the motor finance unit turning profitable ahead of expectations. The retail and SME sectors are expected to drive future growth, comprising 86% of total lending. While the company has assessed its exposure to geopolitical risks in West Asia and found no immediate impact, it continues to monitor the MSME and commercial vehicle segments closely for potential vulnerabilities.
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Tata Capital's projected loan growth could lead to increased access to financing for small and medium enterprises (SMEs) and retail customers, potentially stimulating economic activity in these sectors.
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