Consolidated Key Performance Highlights for 1Q FY25
The Board of Directors of Capri Global Capital Ltd. (CGCL), a non-deposit taking and systemically important NBFC (NBFC-ND-SI) announced the unaudited financial results for the quarter ended June 30, 2024. Key takeaways are as follows:
Business and Earnings Performance
AUM Crosses Rs174,500mn Milestone
CGCL continued the strong growth momentum in Q1FY25. The consolidated AUM including co-lending AUM increased 56% YoY and 12% QoQ to touch Rs 174,579mn. Retail growth was driven by Housing Loans up by 40% YoY and Gold Loans up by 238% YoY. Co-lending AUM stood at Rs 28,601mn comprising 16.4% of consolidated AUM compared to 11.7% in Q4FY24 and 8.9% in Q3FY24. CGCL has continued to build upon its co-lending partnerships in MSME, Housing and Gold Loans with further improving the acceptance ratio. The overall AUM growth was granular with live customer relationships increasing by 197K QoQ to touch 588K.
Strong Profitability with Improvement in Cost Efficiency
The PAT for the Q1FY25 stood at Rs757mn a strong growth of 19% YoY. Overall, yields and spreads expanded in Q1FY25 and Gold Loan business broke even and started giving operating profits. As a result, CGCL’s pre-provisioning operating profit increased to Rs1,452mn, up by 32.5% QoQ. Strategically, CGCL is now shifting focus on improving branch and employee productivity and profitability after undergoing significant expansion. CGCL made significant investments in technology, streamlining headcount and branch network which has started reflecting improvement in productivity which led to a decline of 5.9% QoQ in cost to income ratio. CGCL expects to benefit from tech-led efficiency and further softening of its cost-ratios. Additionally, we are implementing advanced analytics to streamline operations and enhance decision-making processes, which we believe will drive further gains in efficiency
Non-Interest Income Continues to Grow
Our non-interest income increased by 35% YoY in Q1FY25 supported by growth in co-lending fee income. Share of non-interest income in total income stood at 26.5% compared to 25.3% in Q1FY24.
CGCL’s car loan business saw distribution origination of Rs 24,277mn in Q1FY25. We have made 11 tie ups for insurance distribution under the composite license. This shall be an important source of fee income in the future and the Company is looking to generate at least Rs200mn in net fee income from insurance distribution in FY25E.
Stable Asset Quality: Focused Improvement in Provision Coverage Ratio
CGCL is improving the provision cover on its Stage-3 loans. The PCR on Stage-3 loans enhanced to 42.8% in Q1FY25 from 25.8% in Q1FY24. Gross Stage 3 ratio stood broadly flat at 1.97% in Q1FY25 from 1.92% as of Q4FY24.
Strong Capital Adequacy
CGCL maintains a robust financial position with a strong standalone Capital Adequacy of 25.4% in Q1FY25, supported by a networth of Rs 36.3bn. Similarly, CGHFL boasts a CAR of 32.1% and a networth of Rs 8.0bn ending Q1FY25.
Founder & Managing Director Mr. Rajesh Sharma Commented:
“We continue to see strong growth momentum and believe that our significant investments in technology and focus on increasing branch and employee productivity will start yielding results in terms of improving our cost efficiency further. With steady increase in fee income and gold loan business now becoming profitable, we see further upside to our profitability. We will continue to maintain a strong focus on asset quality and strengthen our coverage ratio whilst maintaining healthy capital adequacy. As we move ahead with same vigour, we remain committed to deliver 15%+ RoE over medium term.”
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