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Capital Trust Ltd.

BSE: 511505 Sector: Financials
NSE: N.A. ISIN Code: INE707C01018
BSE LIVE 15:40 | 02 Dec 403.65 -26.65
(-6.19%)
OPEN

402.20

HIGH

425.00

LOW

402.00

NSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 402.20
PREVIOUS CLOSE 430.30
VOLUME 6076
52-Week high 655.00
52-Week low 160.10
P/E 18.28
Mkt Cap.(Rs cr) 597.81
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 402.20
CLOSE 430.30
VOLUME 6076
52-Week high 655.00
52-Week low 160.10
P/E 18.28
Mkt Cap.(Rs cr) 597.81
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Capital Trust Ltd. (CAPITALTRUST) - Chairman Speech

Company chairman speech

Dear Shareholders

I am pleased to present to you the 2015-16 Annual Report of the Company. The currentfiscal has been an exciting one for your Company for some good reasons. To begin with themacroeconomic scenario of the country is pretty strong with positive developments inmanufacturing sector and business environment. The Indian economy grew strongly by 7.6%amidst a rather gloomy external environment as major economies globally witnessed slowdownowing to weak commodity prices volatile financial markets and slowing global trade. Onthe other hand in India inflation and fiscal deficit came down to bearable limitsinterest rates declined and forex reserves strengthened.

The Indian economy that was challenged by slow work-in-progress stalled projectsdelayed clearances and negativity is changing due to initiatives like ‘Make inIndia’ ‘Start-up India’ ‘Jan Dhan Yojana’ ‘DigitalIndia’ and ‘Swachh Bharat Abhiyan’ along with government’s increasingfocus on fast-tracking projects easing business scenario and commitment towards fiscaltargets is improving the country’s outlook. In the World Bank’s ease of doingbusiness index India moved ahead four places to 130 out of 189 countries an indicator ofimproving business scenario.

The micro finance and MSME financing is amongst the most important but most ignored inIndia. MSMEs representing a major chunk of the country’s manufacturing sector oftenface lack of support and financing as banks and other financing agencies focus on eitherbig or small ticket size financing. These enterprises represent the ‘missingmiddle’ segment with widening credit demand gap. Despite a compounded growth of 25%in total credit given to the sector during 2005-14 the sector still has a credit demandgap of Rs 32.5 trillion. As per RBI only 7.42% of the gross non-food credit fromscheduled commercial banks (SCBs) was lent to MSMEs as on March 2016 against 11.15% onMarch 2010.

The Government of India established Micro Units Development and Refinance Agency Ltd(MUDRA) in April 2015 for developing and refinancing all micro-finance institutions (MFIs)that are engaged in the business of lending credits to micro and small entities inmanufacturing services and trading activities. During 2016 the total funding to microunits under Pradhan Mantri MUDRA Yojana (PMMY) increased by Rs 10767 Crores to Rs132955 Crores. In 2016-17 the government has set a target of Rs 1.8 Lakh Crores creditdisbursal under MUDRA.

HIGHLIGHTS 2015_16

The Company witnessed a strong performance during the current fiscal as revenuesincreased 53% from Rs 40.09 Crores in 2014-15 to Rs 61.31 Crores while PAT grew 110% fromRs 9.65 Crores in 2014-15 to Rs 20.25 Crores.

A major development during the year was fresh capital infusion in the business worth Rs61.3 Crores Rs 2.71 Crores and Rs 2.71 Crores from Lighthouse Funds (19.26% stake) SevenHills Capital (0.85%) and Emkay Fincap Limited (0.85%) stake respectively. The additionalcapital resulted in our net worth surging 632% to Rs 160.90 Crores. It shall enable us toexpand and grow aggressively.

The Net Interest Margin of the Company declined 449 basis points to 15.03%. While theNet Operating Income grew 36.25% in absolute terms to Rs 54.46 Crores as the gross assetsunder management (AUM) grew 63% to Rs 304.16 Crores. The primary reason for the decline innet interest margin was due to increase in managed portfolio and micro finance loans (as abusiness correspondent of Yes Bank) that generated lower yields as compared to ownenterprise loans. However these businesses provide us the necessary volume growth forexpanding operations.

The capital adequacy ratio is at a comfortable level of 77.50% providing us enoughroom for comfortable expansion.

STRATEGIC DIRECTION

The Company has played all its cards rightly – it has strengthened financiallyhas a well performing business model has an experienced team of financial experts guidingthe business has backing from reputed fund houses and most importantly is in the rightbusiness area that has lately become a Government focus area for promotingentrepreneurship and manufacturing sector in India which is of utmost importance for thecountry’s growth.

From here on we expect growth to be the only constant as our current infrastructureand capital structure is capable of supporting business growth four to five times thecurrent level. We further intend to grow aggressively through acquiring NBFC-MFI in thenear future.

In the short term we shall focus only on the existing geographies that we currentlyoperate in. These geographies have tremendous opportunities and we have just managed toscratch the surface. These regions shall provide steady business over the next couple ofyears as we leverage our existing strengths to grow with a more concerted effort.

We also look forward to develop banking and other debt financing partnerships thatshall enable us to strengthen our position as a credit financer. These partnerships wouldhelp us in maturing in credit space and open up a gamut of opportunities for the long termgrowth.

MESSAGET O SHAREHOLDERS

I thank you all for your continued support and trust in the Company. I would like toassure you that we are working extremely hard to create a sustainable organisation thatmaximises returns during favourable times while at the same time protect bottomline duringa downturn.

Regards

Yogen Khosla

Chairman & Managing Director

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