The Board of Directors of Capri Global Capital Ltd. (CGCL), a non-deposit taking and systemically important NBFC (NBFC-ND-SI) on Saturday, May 21st, 2022 announced the audited financial results for the quarter and year ended March 31, 2022.
Earnings
CGCL reported a Consolidated Profit after Tax of Rs418mn, up by a sharp 54% YoY but lower by 36% over a stronger Q3 FY22 PAT Rs649mn. One-off elevated credit cost driven by write-offs as well as proactive provisioning caused the sequential dent in quarterly profit. However, the core earnings performance was robust with an operating profit growth of 84% YoY and 7% QoQ. This cushioned the impact of higher credit costs and is also indicative of the earnings strength of CGCL.
Net interest margin for Q4FY22, excluding spreads on co-lending AUM, was 9.7%. Adjusted for one-off spreads in Q3 FY22, the NIMs declined 43bps QoQ. The Company believes NIM is bottoming out and going ahead, a reversal to upward trajectory shall happen.
The FY22 Consolidated RoE was 11.3% while RoA closed at 3.3%. The company maintains its +15% RoE guidance for medium term.
Balance Sheet
Quarterly disbursals crossed Rs10bn for the first time to touch Rs10,406mn, up 12% YoY and 15% QoQ. The full year disbursal increased 2.8x to touch Rs42.9bn. The strong disbursal growth translated into a robust 37% YoY AUM growth. The growth was balanced driven by MSME, Affordable Housing, and Construction Finance segments. The company commenced co-lending arrangement with State Bank of India and Union Bank of India during Dec’21 and had a co-lending portfolio of Rs1.2bn as of Q4 FY22. The co-lending momentum is expected to further pick-up momentum in the next six months.
Liability Management
Outstanding borrowings increased 27% YoY to touch Rs48,084mn. Borrowings were long term and well-diversified across 18 lending institutions. The cost of funds was 8.26%, lower 10bps YoY and up 7bps QoQ. CGCL is well-funded and maintains a well-matched asset liability profile.
Asset Quality
Gross Stage 3 ratio was 2.4%, lower by 92bps YoY and 59bps QoQ. The Consolidated Gross Stage 3 assets at Rs1,562mn were lower on YoY as well as QoQ basis.
Strong Capital Adequacy
Both CGCL and its housing finance subsidiary CGHFL are well capitalized with overall capital adequacy ratio at 29.5% and 49.6% respectively as of Q4 FY22. CGHFL received an equity infusion of Rs1,500mn from parent CGCL on 31st March 2022.
Founder & Managing Director Mr. Rajesh Sharma Commented:
“At CGCL, we are happy to have sustained in a very robust manner the post-Covid19 growth momentum, which restarted from Q4 FY21. As we continue on this growth journey, we shall continue to drive penetration of existing products even as we diversify our growth story. We are geared up to shortly launch the Gold Loan product. In FY23, we shall also look to bolster our growth capability aided by our revamped tech suite. We are confident of delivering amongst the best balance sheet growth rates in our peer group.
We are also cognizant of the rapidly changing macro environment and the tightening interest rate scenario. At CGCL, we have been through multiple interest rate cycles successfully and profitably. We shall navigate the interest rate scenario through a proactive balance sheet management.”
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