Capri Global shares slip 12% in a year; this brokerage sees 24% upside

Choice Institutional Equities has initiated coverage on Capri Global Capital with a ‘Buy’ rating and a target price of ₹230, which implies an upside of 23.6 per cent from Friday’s close at ₹186.05 per share. Capri Global Capital is a diversified Indian non-banking financial company (NBFC) that offers secured and collateralised lending across MSME, Gold, Construction Finance, and Affordable Housing segments.

 

At 9:50 AM, Capri Global Capital stock traded 1.93 per cent higher at ₹189.65 per share. In comparison, BSE Sensex was down 0.03 per cent at 81,883.36.

 

In one year, Capri Global Capital shares have slipped 12.4 per cent, as compared to Sensex’s fall of 1.3 per cent.   READ STOCK MARKET LIVE UPDATES

 

Why is Choice Institutional Equities upbeat on Capri Global Capital?

Diversification boosts growth

Capri Global Capital has transformed from a geographically concentrated, single-product lender to a geographically and portfolio diverse asset under management (AUM), according to the brokerage. This diversification was achieved through high growth in existing products like construction finance and housing finance growing at a CAGR of 44 per cent and 48 per cent, respectively, over FY22 to FY25. Further, the launch of gold loans through the addition of 562 branches in FY23, growing the branch base significantly led to a consolidated three year AUM CAGR of 51 per cent over the same period.

 

Analysts believe the company will be able to sustain these higher yields as gold loans now form a significant 36 per cent of the total AUM. Further, a rating upgrade is likely to improve cost of funds; whereas more efficient branch unit economics and operational leverage will expand net interest margins (NIMs) and improve the cost to income ratio.

Digital and capital push

Capri Global has invested ₹300–450 crore in a digital platform covering customer onboarding to collections, integrated with artificial intelligence (AI) and analytics. The system has improved turnaround times, boosted engagement, enabled cross-selling, and strengthened collections.

 

A ₹2,000 crore qualified institutional placement (QIP) in June 2025 at ₹146.5 per share brought marquee investors onboard, providing growth capital without near-term dilution.  ALSO READ | HAL stock poised for 34% rally; Antique sets highest target on earnings

RoA uplift from non-interest income

Non-interest income contributed 37 per cent of net interest income (NII) in FY25, led by car loan originations, insurance distribution, and co-lending. Car loans generated ₹90 crore (7.2 per cent of NII) through partnerships with 12 banks.

 

Co-lending earned ₹165 crore (12.5 per cent of NII) at 4 per cent yields. Insurance distribution added 5.5 per cent of NII. Overall, return on asset (RoA) is forecast to improve 158 bps over FY25–FY28E, with 114 bps from NII and 12 bps from non-interest income.

Valuation & Risks

With the cost of equity at 11.3 per cent and return on equities (ROEs) expected to touch 18.3 per cent by FY28E. Key risks include regulatory shifts in co-lending, gold price volatility, MSME loan delinquencies, and macroeconomic slowdowns.