The Board of Directors of Capri Global Capital Ltd. (CGCL), a non-deposit taking and systemically important NBFC (NBFC-ND-SI) on Monday, May 22nd, 2023 announced the audited financial results for the quarter and year ended March 31, 2023. Key takeaways as follows:
A Momentous Year
The year FY23 was momentous in many ways for Capri Global. The car loan business scaled new heights, originating Rs60,133mn in new car loans, an increase of 3.5x YoY. The Company launched its Gold Loan business in Aug’22 and by Mar’23, scaled it to a very meaningful network of 562 branches and Rs11,259mn AUM. Share of retail loans in consolidated disbursals increased to 65% from 50% in FY22. And in Mar’23, the Company raised Rs14,400mn equity capital through a well-received Rights Issue. The standout highlight was CGCL’s consolidated net profit for FY23 Rs2,047mn, which despite a strong organic growth push and associated rise in opex, nearly matched the FY22 consolidated net profit Rs2,050mn. The strong business performance and resilient earnings places CGCL firmly in the saddle to deliver mid-teen RoE over medium term.
Earnings – Profitability Bounces Back
Rising share of higher yielding loan portfolio expanded spreads 36bps QoQ to 6.64% in Q4FY23. NII increased 31% YoY / 25% YoY in Q4FY23 / FY23 respectively. Share of non-interest income in net income increased to 36% / 33% in Q4FY23 / FY23 respectively compared to 23% in FY22. Non-interest income was boosted by car loan fees and co-lending income. Non-interest income was up 21% QoQ / 65% YoY in Q4FY23. For FY23, non-interest income increased 2.1x YoY to Rs2,977mn.
Opex in absolute terms increased sequentially. Branch additions as well as headcount increase contributed to the opex increase. However, the C/I ratio saw a soft sequential moderation to 68%. Adjusted for direct expenditure incurred on Gold Loan branch additions, the cost-income ratio in Q4FY23 / FY23 would have been ~48%.
The Q4FY23 Consolidated Profit after Tax Rs649mn was up 55.4% YoY and 73.4% QoQ. The Q4 FY23 Consolidated RoE was 11.7% while RoA was 2.6%.
Balance Sheet – Consolidated AUM Crosses Rs100bn
Disbursals in Q4FY23 increased 87% YoY and 55% QoQ to Rs28,110mn. Disbursals in FY23 are up 70% YoY at Rs72,902mn. On a full year basis, Gold Loans had a 26% share in disbursals while MSME and Housing contributed 26% and 17% respectively. CF and IL together had a share of 36%.
Consolidated AUM including co-lending AUM increased ~56% YoY and ~19% QoQ to touch Rs103,204mn. CGCL aims to maintain the lending momentum and grow its loan book between 35-40% YoY in FY24.
Asset Quality – Steady Improvement
Gross Stage 3 ratio softened to 1.59%, lower 81bps YoY and 73bps QoQ. The PCR on Stage-3 assets was 32%. Including aggregate ECL provisions, the PCR stood at 115%.
Strong Capital Adequacy
CGCL concluded the Rs14,400mn Rights Issue in Mar’23. The CAR improved from 24.2% in Q3FY23 to 39.9% in Q4FY23. The Company is well capitalized from a 5-year perspective.
Founder & Managing Director Rajesh Sharma Commented: “Capri Global navigated well the business scenario during FY23. It was a period of turmoil in global financial space with high inflation, bank runs and bank collapse, and a tight policy environment in advanced economies. Despite the progressively tightening rate environment domestically, CGCL made the most of the growth opportunities in existing businesses while launching and scaling new businesses. Our faith and confidence in our execution capabilities is derived from this experience as well as our business model that is differentiated to serve a customer class not served by leading financial institutions. The equity infusion in Mar’23 has boosted CGCL’s capital adequacy significantly. In FY24, our endeavour shall be growth and profitability. The Company is well-positioned to deliver a 35-40% AUM growth in FY24.”
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