Buy Capri Global Capital; target of Rs 320: Choice Institutional Equities

Moneycontrol • 2 days ago

Original source

Key Investment Pillars

  • Gold Loan Expansion: CGCL's Gold Loan business is expected to drive growth, with a target of ~55% of medium-term AUM and 400-450 new branches planned in the next two quarters.
  • Housing Finance Growth: The company plans to deepen its presence in Tamil Nadu and Andhra Pradesh, focusing on small-ticket and higher-yielding loans.
  • Construction Finance Expansion: CGCL has expanded its footprint with a maiden entry into the Tamil Nadu metro market, with a strong pipeline of projects.
  • Asset Quality: Although asset quality has deteriorated sequentially, the management expects delinquencies to ease significantly by the end of Q3FY27.

Thesis Validation Checklist

To validate the investment thesis, investors should watch for:

  • AUM growth: CGCL's ability to achieve its medium-term AUM target of INR 650 Bn.
  • NIM expansion: The company's ability to maintain or expand its Net Interest Margin (NIM) despite rising costs.
  • Asset quality: Improvement in asset quality, particularly in the Gold Loan segment, is crucial for sustaining growth.
  • Branch expansion: Successful execution of the planned branch expansion, particularly in the Gold Loan segment, will be critical for driving growth.