Capri Global Capital Limited — Q2 FY23 earnings call

Call held 7 Nov 2022

What they filed

Q1 FY27: revenue up 61.0%, net profit up 109.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue554 601 732 766 867 +56%943 +57%1,071 +46%1,233 +61%
EBITDA463 528 621 647 744 +61%— — —
Net profit86 108 158 150 212 +147%221 +105%243 +54%314 +109%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

expansion

  • Gold loan branches expansion · FY2023 · high confidence 550 branches this year
    our target is to open about 550 gold loan branches this year

    — Rajesh Sharma

  • Gold loan branches long-term expansion · 4-5 years · medium confidence 1,500 branches in next 4-5 years
    plans of getting over 1,500 branches in the next 4-5 years

    — Rajesh Sharma

revenue

  • Car loan distribution fee income revenue · FY2023 · high confidence Rs100 crores gross fee income, Rs30 crores net contribution
    this year, we should be able to do Rs100 crores gross fee income from this and Rs30 crores should be the contribution from this vertical alone to the bottom line

    — Rajesh Sharma

growth

  • Overall growth rate growth · ongoing · high confidence 25% plus growth
    continue to grow on our strategy, which we decided few years back – portfolio which is good in quality and focus on a growth of 25% plus

    — Rajesh Sharma

Risks & concerns

  • High competition in gold loan business

    medium

  • Rights issue timeline uncertainty

    medium

  • Elevated cost-income ratio from gold loan expansion

    low

  • Restructured assets still in moratorium

    low

Q&A highlights

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Detailed narrative

Market Outlook

Positive momentum in MSME and housing segments, gold loan market growing at 10% annually

Business Segments

MSME

Rs312 crores disbursals in Q2 vs Rs182 crores in Q1 (71% QoQ growth), 30% YoY growth

Outlook: Remains key growth driver along with affordable housing

Gold Loans

1.8% of AUM, 10% share in Q2 disbursals, 15.1% disbursal yields, 108 exclusive branches operational

Outlook: High-yield business, targeting Rs10,000 crores book in Rs4-5 lakh crores market

Car Loan Distribution

Rs13,634 million originations (4x YoY, 44.7% QoQ), present in 322 locations across 29 states

Outlook: Pure fee income business, targeting Rs100 crores gross fee income for FY23

Co-lending

Rs350 crores+ amount done, growing Rs30-35 crores monthly, new partner Punjab and Sind Bank added

Outlook: ROE accretive as capital required only on 20% share while spread comes from entire amount

Competitive Position

Focused on serving customers not catered to by banks across MSME, affordable housing and gold loans

Strategic Initiatives

  • Gold loan business launch and expansion
  • Geographic expansion in Uttar Pradesh, Uttarakhand
  • Technology and digital partnerships hiring
  • Small finance bank license application preparation
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