Detailed narrative
Market Outlook
The management sees continued growth in the affordable housing segment, supported by government and regulatory thrust to make credit easily available for first-time home buyers. The overall lending market is expected to grow, with co-lending partnerships becoming more acceptable and growing between banks and NBFCs, driven by RBI's objective to reduce customer cost of funds.
Business Segments
Gold Loan
AUM grew by 235% YoY to ₹23,936mn, supported by 298 new branches. 313 out of 747 dedicated branches have crossed ₹30mn break-even, with 113 already profitable.
Outlook: Expected to close FY24 AUM at ₹30,000mn. Next year (FY25) AUM expected to be ₹47bn-₹50bn (50-60% growth). Business expected to break even in Q4 FY24 and contribute ₹400mn-₹500mn profit in FY25. No more branch expansion planned, stopping investment losses.
Home Loan
AUM grew by 53% YoY to ₹34,903mn, driven by 48% YoY growth in disbursement to ₹11,455mn for 9M FY24.
Outlook: No slowdown expected in co-lending or disbursals; segment expected to continue growing for next few years. Targeting 50% growth pace next year.
Construction Finance
AUM grew by 35% YoY to ₹22,710mn, driven by 33% YoY growth in disbursement to ₹13,475mn for 9M FY24.
Outlook: Expect to resolve ₹25mn of Q3 FY24 slippages in Q4 FY24 and remaining ₹81mn in next FY. Stressed project of ₹160mn (Q1 FY24 slippage) approved funding from SWAMIH Fund, likely full recovery in FY24.
MSME Loan
AUM grew by 24% YoY to ₹47,676mn. Contribution as a percentage of total AUM has come down to 35.7% from 44.5% a year ago due to growth in other segments.
Outlook: Evaluating launching micro-LAP (secure lending, ticket size < ₹7.5 lakh) utilizing existing branch network. No immediate plans for new MSME geographies, but under consideration for Q1 FY25. Will continue to show decent growth as it's a key contributor with longer loan tenure (15 years) and customer balance tenure (5 years).
Car Loan Distribution
Originated ₹70,728mn in 9M FY24, up 83% YoY. Net fee generated was ₹805mn. Has a dealership network of 1,800 locations and presence from Jammu to Kanyakumari. Number one among non-car dealer segment.
Outlook: Targeting ₹100bn origination for FY24 (75% YoY growth). Planning to build a tech platform and transfer entire business to newly created wholly owned subsidiary, Capri Loans Car Platform Private Limited, to further scale up in FY25. Expects 20% growth next year and about ₹500mn profit from this vertical alone.
Insurance Distribution
Received composite license from IRDAI. Insurance distribution team in place. Newly incorporated, wholly owned subsidiary, Capri Loans Car Platform Private Limited, became operational and began accruing income.
Outlook: Expect to generate gross insurance fee income of at least ₹1bn between FY25 and FY27. Targeting ₹300mn/year insurance policy premium income from Gold Loan branches from April onwards. Expects ₹400mn-₹500mn income from car insurance business next year. Will contribute to strengthening ROA and achieving 15% ROE by FY27. Technology being built in-house for cross-sell.
Competitive Position
The company states it is number one in the non-car dealer segment for Car Loan distribution, indicating a strong position in that niche. Its extensive branch network (920 total, 747 Gold Loan dedicated) and dealership network (1,800 for Car Loans) provide a wide reach. The focus on affordable housing and MSME segments, coupled with co-lending partnerships, helps maintain competitiveness.