Capital First Ltd. (CFL) is a strong retail NBFC play with a differentiated business model and strong loan product portfolio with promising long term opportunities. It is well managed and engaged in retail segment i.e. MSME funding, Consumer Durables and 2W financing. Strong growth in AUM with diversified portfolio without any impact on asset quality is commendable. Backed by strong and consistent AUM growth, healthy capital adequacy position, changing borrowing mix, we expect RoAA/RoNW to improve by 33/588 bps respectively over the next two years. We believe CFL will command a higher valuation on the back of strong AUM growth, improvement in ratios, experienced management and with...