Capital Trust Completes Lending Model Overhaul

Disbursements Reach ₹89.4 Crore; Operational PBT ₹0.13 Crore in Q4 FY26.

Reader Takeaway: Capital Trust's transition to secured lending shows operational profit, but net profit was affected by a one-time write-off. Investors should monitor the legacy portfolio's impact.

What Happened

Capital Trust Limited announced its financial results for the fourth quarter of fiscal year 2026. The company has completed its year-long transformation, moving from a 100% unsecured own-book lending model to a focus on secured lending, including a gold loan franchise, and a partnership-led co-lending model for MSME origination off-balance sheet.

In Q4 FY26, Capital Trust reported a Profit Before Tax (PBT) of ₹0.13 crore. Total disbursements surged to ₹89.4 crore, a 4.5 times increase from the third quarter of FY26. Total borrowings were significantly reduced to ₹24.2 crore, down from ₹93.2 crore in Q4 FY25. The company also reported a 0% Net NPA.

A significant one-time, non-cash write-off of a deferred tax asset, totaling ₹19 crore, impacted the reported net profit for the period.

Why It Matters

This strategic shift aims to reduce business risk by prioritizing secured assets and leveraging partnerships for loan origination. The substantial growth in disbursements and the reduction in borrowings signal progress in implementing this new strategy. The positive operational PBT suggests the core business is generating income under the new model, while a 0% Net NPA indicates improved asset quality.

Background

Capital Trust has undergone a significant restructuring over the past year. The company historically operated with a high-risk unsecured lending model. To strengthen its financial position and improve its risk profile, it raised capital through a ₹23.8 crore Rights Issue in November 2025, which was oversubscribed 1.33 times. This capital infusion, coupled with a focus on secured assets, has helped reduce its debt-to-TNW leverage to below 1x.

What Changes Now

The company is now positioned to scale its secured gold loan business and its co-lending partnerships. The operational focus will be on expanding disbursements in these segments. The balance sheet appears cleaner, with reduced borrowings and improved capital adequacy (CRAR >35%).

Risks to Monitor

The primary concern is the one-time ₹19 crore write-off that affected net profit. Investors will need to distinguish between operational performance (PBT) and net profit impacted by such exceptional items. While the company states that provisioning for the ₹294 crore legacy portfolio is complete, continued monitoring is necessary to ensure no further issues arise from this older book.

Context Metrics

• Monthly disbursements grew from ₹1.9 crore in October 2025 to ₹43.1 crore by March 2026.
• By March 2026, 56% of total Assets Under Management (AUM) at ₹89.0 crore was categorized as zero-credit risk or fully secured.
• Total AUM stood at ₹158 crore in Q4 FY26, with Own AUM at ₹32.8 crore and Managed AUM at ₹125.2 crore.

What to Track Next

Investors will be watching the continued growth of disbursements in the secured and co-lending segments. The ability to maintain operational profitability and the absence of further issues from the legacy portfolio will be key indicators of the new business model's success.