CP Capital posted a significant improvement in profitability and asset quality for the quarter ended June 30, 2026. Standalone profit after tax (PAT) surged 102% quarter-on-quarter (QoQ) to ₹11.5 crore from ₹5.7 crore in the previous period. Revenue from operations expanded 46% QoQ to ₹19.4 crore, while EBITDA rose 65% to ₹18.0 crore.

On a consolidated basis, the company reported a 46% QoQ increase in PAT to ₹13.3 crore. Consolidated revenue grew 18% QoQ to ₹21.9 crore, supported by a 36% rise in consolidated EBITDA to ₹20.5 crore. The earnings per share (EPS) stood at ₹6.31 on a standalone basis and ₹7.32 on a consolidated basis.

Financial Performance

The company’s financing division continued to dominate revenue generation, contributing approximately 87% of segment revenue in Q1FY27, up from 77% in the same quarter last year. Interest income remained the primary revenue driver, logging ₹139.72 crore standalone and ₹144.17 crore consolidated.

Asset Quality Improvement

Gross NPA ratio improved sharply, falling from 18.76% as on March 31, 2026, to 8.9% as on June 30, 2026. The gross loan book contracted slightly to ₹394.2 crore from ₹442.12 crore. Crucially, 99.9% of the gross NPA (₹35.17 crore) is secured by collateral valued at ₹87.7 crore, providing a coverage ratio of approximately 2.5x. Provisions on NPA dropped significantly to ₹6.50 crore from ₹50.30 crore in the prior quarter.

Loan Book Composition

As of June 30, 2026, the standalone gross loan book was diversified across three primary products:

• Loan Against Property (LAP): 48% of the loan book, consisting of secured lending backed by residential or commercial property collateral.
• Unsecured Business Loan: 43% of the loan book, providing working-capital funding for MSME and small-business borrowers.
• Trade Finance: 9% of the loan book, offering trade finance for participants in wholesale market transactions.

Leverage Profile

The company’s conservative capital structure improved further during the quarter. The debt-to-equity ratio (borrowings divided by equity) declined from 0.16x as on March 31, 2026, to 0.14x as on June 30, 2026. This low leverage provides substantial headroom to scale the loan book through incremental borrowing.

What the Numbers Show

The divergence between the sharp rise in PAT and the modest decline in impairment charges warrants attention. While impairment on financial instruments fell to ₹14.19 crore from ₹123.39 crore in the previous quarter, a substantial portion of the profit growth was driven by fair value changes. Net gain on fair value changes swung to a positive ₹33.60 crore in Q1FY27, compared to a loss of ₹12.27 crore in Q4FY26. This indicates that while credit costs stabilized, valuation gains played a material role in the bottom-line expansion.

Strategy and Outlook

Management intends for digital lending to account for a rising share of incremental assets under management (AUM) over the medium term, reducing dependence on branch-led, high-operating-expense origination. The company plans to scale the loan book using available headroom, noting that the standalone debt-to-equity of 0.14x leaves room to gear up. Additionally, partnerships with lending-service-providers are expected to allow AUM to scale without proportionate balance-sheet expansion, preserving the conservative leverage profile.

Corporate Actions

The Board approved a technical write-off of an outstanding loan of ₹439.73 lakh due from Proseed Foundation Trust. The amount had been fully provided for in earlier years, so the write-off has no impact on current profitability. Legal proceedings for recovery remain pending. The company also scheduled its 26th Annual General Meeting for September 29, 2026, with e-voting facilities available from September 25 to September 28, 2026.

CP Capital reported its strongest consolidated financial performance for the year ended March 31, 2026, with profit after tax rising 11.7% to ₹4,257.80 lakh. Total revenue for the period advanced 14.8% to ₹7,649.28 lakh, driven by a disciplined expansion of the lending book and diversified income streams. The company’s net loan book grew 10% year-on-year to ₹44,215.82 lakh, while total assets increased to ₹66,252.32 lakh.

The Board of Directors approved the audited standalone and consolidated financial results for the quarter and year ended March 31, 2026. The statutory auditors, M/s S. P. Chopra & Co., issued an unmodified opinion on the financial results. Additionally, the Board re-appointed M/s BDG & Co. LLP as the internal auditors for the financial year 2026-27. The company published the financial results in newspapers "The Financial Express" and "Jansatta" on May 31, 2026, pursuant to Regulation 47 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Consolidated Financial Performance

Consolidated revenue from operations for FY26 stood at ₹7,631.56 lakh, a 14.75% increase from the previous year. Interest income remained stable at ₹5,578.91 lakh, while rental and infrastructure income surged 158.5% to ₹1,725.72 lakh. This shift diversified the revenue mix, with rental income now contributing 22.6% of total revenue compared to 10% in FY25.

Standalone Results

On a standalone basis, the company reported a profit after tax of ₹3,158.97 lakh for FY26, compared to ₹4,066.47 lakh in the previous year. The decline was attributed to the absence of non-recurring dividend income of ₹727.36 lakh recorded in FY25. Excluding these one-time items, the underlying core lending business showed steady growth. For the quarter ended March 31, 2026, standalone profit after tax was ₹568.13 lakh.

Balance Sheet and Capital Allocation

The company’s balance sheet remained conservative with a debt-to-equity ratio of 0.13x. Total equity expanded to ₹57,291.76 lakh, driven entirely by retained earnings. Borrowings increased to ₹7,720.69 lakh from ₹4,193.04 lakh in the prior year to fund the loan book expansion. Net worth per share improved to ₹314.91 from ₹299.94.

Segment Performance

The Financing Division reported a profit before tax of ₹4,100.96 lakh for FY26, while the Infra Division contributed ₹1,260.89 lakh. Segment assets for the Financing Division stood at ₹46,877.22 lakh, with the Infra Division holding assets worth ₹19,313.58 lakh.