1. Opening Hook
Capri Global spent Q2FY26 doing what most NBFCs only dream of — adding branches like Starbucks, raising NCDs like it’s a subscription business, and growing AUM a juicy 40% YoY. While other lenders blamed “macroeconomic uncertainty,” Capri calmly added 86 branches and a CEO. Classic flex.
As the Quran says, “With hardship comes ease.” Capri has decided to skip the hardship part altogether.
Buckle up — the really wild bits come later.
2. At a Glance
- AUM up 40% – Growth so aggressive it probably needs a seatbelt.
- NII up 57% – Interest income is lifting heavier than gym bros.
- PAT up 143% – Profit chart basically hit turbo mode.
- Gold AUM ₹10,406 cr – Inflation loves gold; Capri loves inflation.
- NIM at 16.5% yield / 6.9% spread – CFO says “no sorcery,” but we don’t believe him.
- Gross Stage 3 at 1.3% – Asset quality behaved better than Twitter debates.
**3. Management’s Key Commentary
(Direct Quotes + Savage Translations)**
“Our maiden NCD issue was oversubscribed across all investor categories.”
(Translation: Everyone wants to lend us money — even people who don’t like lending. 😏)
“Gold loan AUM crossed ₹10,000 crores.”
(Translation: Indians pawning gold is now a structural growth story.)
“AUM per employee increased from ₹1.4 cr to ₹2.1 cr.”
(Translation: Employees now do the work of two people — congratulations, no salary hike.)
“Yield on net advances improved to 16.5%.”
(Translation: Yes, people will pay that much. Don’t ask why.)
“Cost-to-income improved from 64% to 49%.”
(Translation: Expense control so good even startups should take notes.)
“We see no credit issues in construction finance.”
(Translation: Residential real estate is booming, so relax.)
“We are targeting 4%+ ROA and 16–18% ROE by FY28.”
(Translation: We plan to be the HDFC Bank of NBFCs… without saying it aloud.)
4. Numbers Decoded
Metric | Q2 FY26 | YoY Change | One-Line Analysis
---------------------------|------------------|------------|-------------------------------
AUM | ₹27,040 cr | +40% | Expansion mode: ON.
Disbursements | ₹8,952 cr | +64% | Capri handing out loans like prasad.
NII | ₹480 cr | +57% | Interest income doing cardio.
Non-Interest Income | ₹203 cr | +97% | Insurance + co-lending = jackpot.
PAT | ₹236 cr | +143% | Profit graph → 🚀.
Gross Stage 3 | 1.3% | -39 bps | ARC sale cleaned the room.
Gold Loan AUM | ₹10,406 cr | +58% | Glittering numbers, literally.
Construction Finance | ₹4,969 cr | +48% | Mid-size developers full steam ahead.
Branch Count | 1,224 | +86 QoQ | Capri going pan-India at warp speed.
One-liners:
- AUM growth looks like a fintech startup but with actual profits.
- Credit costs dropping → CFO is sleeping peacefully again.
- Fee income doubling → why lend when you can earn commissions?
5. Analyst Questions (Summaries + Mock Translations)
Q: Why add 86 branches this quarter?
Mgmt: “Expansion mode is back.”
(Translation: We’re building a branch army.)
Q: Is co-lending helping ROE?
Mgmt: “Capital light + full spread = best of both worlds.”
(Translation: Free lunch does exist.)
Q: MSME NPAs reduced — is stress gone?
Mgmt: “ARC sale cleaned sub-₹20 lakh loans.”
(Translation: We outsourced the headache.)
Q: Gold loan customers willing to pay 20%?
Mgmt: “They care about speed, not rate.”
(Translation: Instant money > cheap money.)
Q: ROA looks inconsistent for FY27 guidance.
Mgmt: “Use average assets, not closing AUM.”
(Translation: Math, my friend. Math.)
6. Guidance & Outlook
Capri’s guidance reads like an NBFC power fantasy:
- AUM growth: 30%+ annually till FY28 (maybe even 35%)
- FY26 AUM: ₹32,000 cr
- FY27 AUM: ₹42,000 cr
- Margins: NIM to inch up as cost of funds drops 30–40 bps
- ROA: 4–4.5% sustainable
- ROE: 16–18%
- Credit cost: 80–90 bps (conservative, mostly MSME-driven)
- Gold branches: ~995 by March 2026
- Co-lending mix: Steady at 20%
Assumptions (bold ones):
- No macro slowdown.
- Housing demand stays hot.
- MSME stress stays contained.
- Competition in gold loans doesn’t spark discount wars.
- RBI doesn’t get cranky with NBFC growth.
7. Risks & Red Flags
- Gold loan hypergrowth – High yields attract competition quickly.
- Branch expansion pace – Execution risk when 200 branches planned in 6 months.
- MSME portfolio – Still sensitive to economic hiccups.
- Heavy reliance on co-lending banks – Any guideline hiccup = growth choke.
- Fee income volatility – Insurance + co-lending commissions can swing sharply.
8. Badi Badi Baatein Vadapao Khate — Will They Walk the Talk?
Capri has a history of overdelivering on growth whenever liquidity, talent, and distribution align. The gold loan engine is firing, construction finance is stable, and MSME/LAP is expanding into southern markets.
But:
- Scaling 200+ branches quickly is ambitious.
- Achieving 4.5% ROA consistently is a big-boy target.
- Co-lending dependence needs continuous bank alignment.
Net-net: Their guidance is aggressive, but not unrealistic given current momentum.
9. EduInvesting Take
Strengths:
- Strong multi-engine portfolio: gold, MSME, housing, construction finance.
- Branch network scaling fast → distribution moat.
- Fee income diversification working beautifully.
- Asset quality stable despite rapid growth.
- Capital adequacy high after ₹2,000 cr infusion.
Weaknesses:
- MSME still carries latent credit risk.
- High growth can mask underlying issues temporarily.
- Gold loan market highly competitive and rate-sensitive.
Monitor Next:
- Cost of funds trend post-NCDs.
- Gold loan tonnage growth vs price-led growth.
- MSME stress post-ARC sale removal.
- Fee income consistency.
- Operating leverage as new branches mature.
Forward-looking view:
Capri looks positioned for a multi-year expansion cycle with improving ROA/ROE — provided asset quality stays disciplined.
10. Conclusion
Capri Global delivered a quarter that checks every NBFC investor box: explosive AUM, expanding spreads, rising fee income, disciplined asset quality, and confident guidance. If they execute the coming branch tsunami and maintain credit costs, FY26–28 could be their breakout era.
Written by EduInvesting Team
Sources: Capri Global Capital Ltd Q2 FY26 Earnings Call, Investor Presentation, Market Reports, Regulatory Filings, Industry Data.