Capri Global Capital Posts 77% Surge in Q2 Profit

Profit After Tax rose to Rs 418 crore with AUM reaching Rs 43,878 crore.

Reader Takeaway: Robust AUM growth across core segments drives profitability, though monitoring of gold loan asset quality remains critical.

What just happened

Capri Global Capital delivered a strong quarterly performance for Q2 FY '27, marked by a 77% year-on-year rise in Profit After Tax (PAT) to Rs 418 crore. The company’s consolidated Assets Under Management (AUM) expanded by 62% to Rs 43,878 crore. Net Interest Income (NII) also saw a significant boost, climbing 69% YoY to Rs 812 crore.

Why this matters

The company’s operational efficiency improved, with the cost-to-income ratio tightening to 41% from 49% in the same period last year. This demonstrates successful scaling and the effective use of technology. Strong growth in diverse segments—Gold Loans at Rs 21,000 crore, MSME at Rs 7,016 crore, and Housing at Rs 8,325 crore—indicates a healthy, diversified retail-led portfolio.

Asset Quality and Operational Performance

Management addressed concerns regarding a spike in Stage-2 assets, attributing it to technical adjustments following the introduction of short-tenure gold loan products in Q1. The company has since reverted to longer-tenure products to stabilize the portfolio. Gross Stage-3 assets remain controlled at 1.2%.

Guidance and Future Outlook

Management has reiterated its FY '27 PAT guidance of approximately Rs 1,600 crore and set an ambitious AUM target of Rs 65,000 crore for FY '28. The company aims for a sustained Return on Equity (ROE) between 20% and 21%.

Risks to watch

Investors should closely watch the resolution of Stage-2 accounts and the impact of potential shifts in interest rates on borrowing costs. Additionally, the company is conducting gap assessments related to recent IRDAI consultation papers regarding insurance distribution.