Capri Global Capital Ltd. share price target

We expect CGCL’s valuation multiple to remain stable, supported by improving return ratios, adequate capital buffers, and earnings visibility. The assigned multiple aligns with current trading levels and reflects a balance between growth and regulatory discipline inherent to NBFCs.

Riding the Gold Loan Surge

Capri Global Capital (Capri), in its analyst day on Sep 15, ’23, reiterated its vision to grow its portfolio to INR 30bn in the next five years, while continuing to pursue ‘granularisation’ strategy. New products, i.e. gold loans, car loan distribution and co- lending are likely to be its primary growth drivers, coupled with >30% growth in existing product segments.

Capri Global Capital (Capri) demonstrated superior execution of its ‘granularisation’ strategy in FY23 with combined share of MSME, gold and affordable housing increasing to 79% (74% in FY22) and trimming construction finance (CF) share to 18% vs 19% in FY22.

limited given the nature of loan exposure, improved collection efficiencies (CE), and NIFTY *as on 12 Nov 2020; Source: Bloomberg, MNCL Research underlying collaterals. We are factoring in 18.5% / 17.1% CAGR in AUM/profit over...

While there have been past run-ins and there is a lack of institutional holding, we're not overly skeptical, and we believe that CGCL has business potential. However, current valuations (~2.5x trailing P/ABVs) are rich. Capri Global Capital (CGCL) is an ostensibly picture perfect NBFC, present across under-penetrated, fast growing and high yielding segments. With an AUM of ~Rs 40bn (45% CAGR over FY 15-19), the co lends to MSMEs (~50% of AUM), small-mid-sized developers (CF, ~27%), home buyers (HF, ~21% of AUM) and other NBFCs (IRL). At present, its operations span 85 branches across 8 states. While reported stress has been trending upwards, current levels are not alarming (GS-III at ~2.3%).

Capri Global Capital (CGCL) is a diversified NBFC led by first generation entrepreneur Rajesh Sharma. It has a presence across high growth & yield segments like MSME, construction finance & housing. As of FY19, its AUM is at | 4103 crore with MSME (48%), construction finance (30%) & housing (20%) being the main business segments. It has a strong reach in eight states with 84 branches and a combined live account greater than 19500. It...

We interacted with Capri Global (Capri) management to get an update on their business, liquidity situation and growth opportunities. A diversified product portfolio and well-defined customer segments have enabled Capri to register a robust 45% CAGR in assets under management (AuM) over FY15-18. Management has guided for growth acceleration with greater thrust on asset quality. To that end, Capri has built in a strong credit structure across the entire value-chain that aids in containing delinquencies. Adequate liquidity on its balance sheet and strong capital position (CAR at 37%) augur well from growth perspective. We remain convinced about Capri's growth strategy and are factoring in 42%/35%/41% CAGR in AuM/revenue/ earnings over FY19-21E. Prudent capital...

We initiate coverage on Capri Global (CGCL) with a BUY and a target price of Rs165 (valued at 2x FY20E ABV). Backed by a proven track record of strong growth and profitable operations across key areas of presence - MSME, construction finance and housing portfolio, CGCL has re-drawn its growth strategy with an aim to cement its position further. We believe that the efforts aimed at strengthening the key pillars around these businesses - a) greater reliance on self-origination of loan portfolio, b) attain deeper penetration via enhanced branch reach and c) prudent capital consumption will yield positive outcome over FY18-21E. We expect CGCL to witness a) robust 47% CAGR in AuM, b) strong earnings profile...

Incorporated in 1997, Capri Global Capital Limited (CGCL) is one of the most widely extended Non Deposit Taking Systemically Important Non-Banking Financial Company (NBFC- ND- SI) in the country, offering versatile and simpler solutions. CGCL is a listed company on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE); and is also registered with the Reserve Bank of India (RBI).CGCL caters to the capital needs of MSMEs through its SME & Retail Lending vertical by offering them multiple products such as MSME business Loans, Working Capital Term Loans, Term Loans Against Property Rentals and Term Loans for Purchase of Property. CGCL has 38 branches as...