Target: ₹230
CMP: ₹189.60
Capri Global Capital Ltd (CGCL) maintains a well-diversified portfolio both, product-wise gold loans about 37 per cent, other segments 18–20 per cent each) and geographically (no region exceeds 22 per cent of the book). Growth is propelled by a retail focussed strategy and strong asset quality. Leveraging technology enabled operations and robust underwriting, it sustains a high net interest margin of 8.9 per cent while reducing the cost-to-income ratio, from 65 per cent to 46 per cent.
Non-interest income accounts for 28 per cent of CGCL’s Total Income, led by fees, insurance and channel origination. Leveraging partnerships with 12 banks, CGCL earns high fee income without risk sharing on its co-lending book.
CGCL leverages a 150-member in-house tech team, including over 25 data scientists, to drive fully digital loan origination, underwriting and collections.
We value CGCL using the Residual Income Approach. We calculated Cost of Equity to be at 11.3 per cent, with ROEs projected to reach 18.3 per cent by FY28E supported by Income Growth and softening cost. We retain our “Buy” rating on the stock with a target price of ₹230, implying P/ABV of 2.9x/2.5x of FY27E/FY28E.
Key risks: Impact of changes in co-lending policy, possible downturn in economic conditions, leading to higher MSME delinquencies, slower-thanexpected loan growth and fluctuation in gold prices.