Auto NBFC disbursements surge 20.7% YoY in Q1FY27 amid portfolio diversification
3 min readAuto finance NBFCs’ Q1FY27 disbursements rose 20.7 % YoY to ₹1.04 lakh crore, but slipped 4.6 % QoQ as commercial‑vehicle volumes normalized after the Q4FY26 pre‑buying spike. A Centrum report noted that auto NBFCs delivered robust earnings in the first quarter of FY27, hitting fresh highs as assets under management expanded roughly 17 % YoY.
Key Takeaways
- Auto finance NBFC disbursements rose 20.7% YoY to Rs 1.04 lakh crore in Q1 FY27, though down 4.6% QoQ, per Centrum.
- Assets under management grew about 17% YoY as the growth engine shifted from a CV-led surge to broader diversification.
- Commercial-vehicle disbursements fell sequentially across most lenders as fleet operators worked off Q4 FY26 pre-buying.
- Cholamandalam, Shriram Finance and Mahindra Finance saw the steepest CV disbursement declines, while Sundaram Finance was the exception.
The growth engine has matured, shifting from the CV‑led surge of FY26 to a broader, more diversified expansion phase. The report quoted: “Disbursement growth remained healthy on a year‑on‑year basis, sustained by continuing GST‑rate‑cut tailwinds and resilient PV and tractor demand, while CV financing cooled sequentially across nearly every lender—not a demand issue but a normalization after an unusually heavy Q4FY26, as fleet operators and OEMs work off the prior quarter’s pre‑buy before festive‑season restocking picks up later in FY27.”
CV disbursements fell sequentially for major lenders, according to the report: Cholamandalam –14.7 %, Shriram Finance –13.8 %, Mahindra Finance –24.9 %, Sundaram Finance –3.5 %. Sundaram Finance was the sole lender to record positive quarter‑on‑quarter overall disbursement growth of 11.1 %, aided by its retail franchise.
Non‑commercial‑vehicle segments continued to gain ground on balance sheets. Cholamandalam’s non‑vehicle share exceeded 40 % of total disbursements, while Shriram Finance saw its non‑CV vehicle finance segment climb 25 % YoY. “The more durable story this quarter was diversification: SME/LAP, gold loans, construction equipment, personal loans and home loans kept gaining share across balance sheets, a deliberate strategy by most lenders to reduce dependence on the vehicle cycle and smooth earnings through periods exactly like this one,” the report said.
On the operational and profitability front, sector pre‑provision operating profit (PPOP) climbed 35.7 % YoY to ₹11,771 crore, while profit after tax (PAT) surged 53.4 % to approximately ₹6,519 crore. Asset quality remained stable on an annual basis despite a seasonal monsoon blip, with Stage 2 and Stage 3 assets rising QoQ across all lenders. The report noted that management teams across the sector maintain confident growth guidance for FY27, targeting mid‑teen to low‑20s AUM growth through market‑share gains and product diversification.
Published on August 22, 2026
