Capri Global Capital Limited (CGCL) has announced strong financial results for the first quarter, marking significant growth across key metrics and strategic initiatives.

Impressive Financial Performance

The company reported a substantial 42% year-on-year growth in consolidated Assets Under Management (AUM), reaching INR24,754.00 crore. This growth was primarily driven by robust performance in the retail segment, particularly in gold loans and housing finance.

Net Interest Income (NII) saw a healthy increase of 38% to INR416.00 crore, while Profit After Tax (PAT) surged by an impressive 131% to INR175.00 crore. The company's cost-to-income ratio improved significantly to 46% from 65% in the previous year, reflecting enhanced operational efficiency.

Strategic Capital Raise

A key highlight of the quarter was the successful completion of a Qualified Institutions Placement (QIP), raising INR2,000.00 crore in primary equity capital. This marks CGCL's first QIP in over a decade and received strong interest from both domestic and foreign institutional investors.

Segment-wise Performance

Gold loans emerged as a standout performer, with the AUM in this segment growing by 69% year-on-year. The housing finance portfolio also showed robust growth of 32% year-on-year.

Asset Quality and Risk Management

Despite the rapid growth, CGCL maintained a focus on asset quality. The gross Stage 3 asset ratio stood at 1.7%, with a net Stage 3 ratio of 1%. The company reported an increase in credit costs to INR81.00 crore, primarily due to higher ECL provisions and some slippages in the MSME segment.

Expansion Plans

CGCL announced plans to add 200-250 branches this year, with a focus on expanding into Southern India markets including Tamil Nadu, Andhra Pradesh, Karnataka, and Odisha. The company aims to establish 700-800 branches over the next three years to support its growth trajectory.

Technology and ESG Initiatives

The company continues to invest in technology and data science capabilities, spending INR26.00 crore in the quarter on various initiatives. CGCL also received a strong ESG rating of 69 from NSE Sustainability Rating Analytics, placing it ahead of most listed NBFCs on the NSE.

Future Outlook

Management has maintained guidance for 30% AUM growth and expects a Return on Average Equity (ROAE) of 13.5-14% for the current fiscal year. Looking ahead, the company aims to achieve:

• Return on Average Assets (ROAA) of about 4%
• ROAE in the range of 16-17%

Rajesh Sharma, Managing Director of Capri Global Capital Limited, commented on the results, stating, "Our Q1 has set a solid tone. The addition of INR2,000.00 crore capital raise gives us the financial strength to accelerate growth across lending and new verticals. Backed by a secured book, healthy asset quality, and solid technology infrastructure, we remain on track to grow 30% annually and deliver sustainable ROAE of between 16% to 18% and ROAA in the medium term to 4% and even going up to 4.5%."

With its strong performance, strategic capital raise, and clear growth plans, Capri Global Capital Limited appears well-positioned to capitalize on opportunities in the financial services sector while maintaining a focus on asset quality and operational efficiency.

Capri Global Capital , a prominent Non-Banking Financial Company (NBFC), reported a significant year-on-year growth in its net profit for the first quarter, despite facing challenges with increasing bad loan provisions. The company's financial performance showcases both strengths and areas of concern in the current economic landscape.

Profit Growth and Quarterly Performance

Capri Global Capital announced a net profit of Rs 175.00 crore for the quarter, marking a substantial year-on-year increase of over 100%. This impressive growth demonstrates the company's ability to expand its operations and generate higher returns. However, it's worth noting that the profit saw a marginal decline of 2% compared to the previous quarter, indicating some short-term challenges.

Rising Provisions Impact Quarterly Results

The slight quarter-on-quarter decline in profit can be attributed to a significant increase in provisions for bad loans. Loan impairment costs surged four-fold to Rs 815.00 crore, up from Rs 185.00 crore in the previous quarter. This substantial rise in provisions reflects the company's proactive approach to managing potential risks in its loan portfolio, but it also puts pressure on short-term profitability.

Asset Quality Concerns

The company's asset quality showed signs of deterioration during the quarter. Non-performing assets (NPAs), representing loans overdue for more than 90 days, increased to 1.7% of the loan book, up from 1.5% in the previous period. This uptick in NPAs suggests that Capri Global Capital is facing some challenges in maintaining the quality of its loan portfolio.

Revenue and Operational Performance

Despite the challenges, Capri Global Capital demonstrated strong revenue growth. The company's revenue for the quarter stood at Rs 977.30 crore, representing a 6.69% increase compared to the previous quarter (Rs 916.00 crore) and a substantial 38.45% growth year-on-year (from Rs 705.90 crore).

Profitability Metrics

The company maintained a robust Operating Profit Margin (OPM) of 63.49% for the quarter, showing a slight improvement from 63.3% in the previous quarter. This indicates that Capri Global Capital has been able to manage its operational efficiency effectively.

Financial Highlights

Capri Global Capital's performance this quarter reflects a company navigating through a complex financial landscape. While the substantial year-on-year profit growth and strong revenue performance are positive indicators, the increased provisions for bad loans and rising NPAs suggest that the company is taking a cautious approach in the face of potential credit risks.

The management's decision to significantly increase loan impairment provisions demonstrates a proactive stance towards risk management, which may help safeguard the company's long-term financial health. However, this approach has had a short-term impact on quarterly profit growth.

As Capri Global Capital moves forward, investors and analysts will likely be watching closely to see how the company balances its growth ambitions with prudent risk management in the evolving economic environment.