Capri Global Capital Ltd Q3 FY2026 Concall Summary

Key Takeaways

• Gold Loan powers 80% YoY growth, branch engine still revving: Gold Loan AUM surged 80% YoY on 68 new South India branches, with existing branches still expected to deliver 30%+ growth.
• Spread improves even as leverage dilutes NIM: Spread rose 10 bps to 7.0% while NIM fell to 9.1%; management guides spread to 7.2% next quarter on rising Gold Loan mix and falling cost of funds.
• Technology is the margin story: Disbursements up 87% YoY against just 19% headcount growth, driven by an AI-native operating model that compresses turnaround times and holds the cost-to-income ratio to 51.6%.
• CEO resigns within four months: The newly appointed CEO left to pursue a fin-tech entrepreneurial opportunity; management states adequate vertical-level leadership exists and impact will be limited.
• What to watch next quarter: Whether Gold Loan yield improves the promised 20-25 bps, whether MSME Uttar Pradesh branches hit the ₹20 crores monthly disbursement run rate by March, and any signal on the RBI branch expansion approval timeline.

Gold Loan: The Growth Engine

• Branch-led expansion into new geographies: 68 net new branches across Orissa, Andhra Pradesh, Telangana and Karnataka drove the 80% YoY AUM jump, with branch productivity rising to ₹14.1 crores AUM per branch.
• Productivity runway remains long: Many branches are still below ₹10 crores AUM while some have reached ₹25 crores, giving management confidence that existing branches can sustain 30%+ growth without new openings.
• Yield compression is strategic, not structural: Yield declined QoQ because the mix shifted toward smaller-ticket rural loans where harvesting-cycle cash flows let customers stay in lowest-ROI rebate brackets; management expects 20-25 bps improvement going forward.
• Market shift from informal to formal continues: Even with gold price corrections, the large informal segment (money lenders, jewellery shops) keeps migrating to organized NBFCs on fair practice and better rates, supporting decent growth independent of price moves.
• Granularity insulates against gold price risk: Ticket sizes are small and diversified enough that gold price corrections pose no real recovery risk, especially since gold remains in the company's custody throughout the loan.

Sharma: "So, there exists a good scope that these branches will continue to deliver a 30% plus growth."

Spread, NIM & Cost of Funds

• Spread is the relevant metric, not NIM: Spread improved 10 bps QoQ to 7.0% while NIM fell to 9.1% because higher leverage mechanically compresses net interest; management guides 7.2% spread in Q4.
• Cost of funds fell 24 bps QoQ: Driven by MCLR reduction, effective repricing of existing liabilities, and banks lowering risk spreads due to the internal rating model. Further diversification into commercial paper and short-term NCDs added lower-cost borrowing.
• Another 24-25 bps reduction expected in 3-6 months: This projection excludes any rating upgrade benefit; a rating upgrade takes 6-9 months to flow through P&L because existing borrowing resets only at the reset date.
• Gold Loan yield expected to stabilize around 18%: The QoQ decline was tied to rural small-ticket mix and rebate schemes; improvement of 20-25 bps is expected as the retail Gold Loan focus deepens and branches scale.

MSME, Housing & Construction Finance

• MSME grew 19% YoY, Uttar Pradesh branches scaling: 16 branches opened in Q2 FY26 now run at ₹9.5 crores monthly disbursement; management expects this to cross ₹20 crores per month by March. New operations commenced in Mumbai, Pune and Delhi to diversify customer risk.
• Micro LAP gains traction with strong asset quality: AUM reached ₹650 crores across 151 branches (14 added in Q3), with 99% collection efficiency and 0.9% GNPA. Technology tools reject bad customers at sourcing.
• Housing AUM grew 40% YoY on affordable demand: Resilient demand driven by rising income levels and lower interest rates; 18 net new branches expanded presence into Andhra Pradesh and Karnataka.
• Construction Finance grew 37% YoY with disciplined underwriting: 279 active residential projects funded, focused on mid-sized and small developers in metro and Tier 1 cities with escrow-based cash flow management keeping the book granular and geographically diversified.

Asset Quality & Operating Leverage

• Impairment cost declined, Stage 3 ratios improved: Impairment cost fell to ₹23 crores from ₹31 crores QoQ. Gross Stage 3 ratio down 10 bps to 1.2%, net Stage 3 down 7 bps to 0.7%. Provision coverage ratio on Stage 3 loans improved to 43.6%.
• Cost-to-income ratio improved sharply to 51.6% from 58.2% YoY: Maturing branch network, rising productivity, and strong operating leverage drove the improvement even as opex rose 15% QoQ on 869 net employee additions and higher incentive pay tied to disbursement growth.
• Technology delivers disproportionate scale: Disbursements rose 87% YoY while headcount grew only 19%, enabled by AI-native tools across onboarding, underwriting, processing and collections. Gold Loan turnaround time is under 30 minutes; preapproved top-up loans disburse in 60 seconds.

Sharma: "If we can say that our -- while number of branches have gone up significantly, AUM have been doubled, our manpower have -- headcount have increased only by a marginal 19% of that. So our focus is going to become how we become operationally very, very efficient by using all these tech and data science tools."

Non-Interest Income & Insurance

• Non-interest income grew 124% YoY to ₹240 crores, now 32% of net total income: Driven by co-lending fee income of ₹116 crores and insurance distribution commissions of ₹34 crores.
• Capri Care insurance ecosystem upgraded: Fully digital end-to-end platform with instant real-time policy issuance; product portfolio expanded beyond financial indemnity to wellness-led offerings including annual health screening and cashless consultation.
• Co-lending capped at 22-23% of book: Management does not intend to grow co-lending further from this level, keeping the off-balance-sheet share stable.

CEO Resignation & Leadership

• CEO resigned within four months of appointment: Mr. Monu, based in Delhi, reconsidered the move to Mumbai and chose to pursue a fin-tech entrepreneurial opportunity instead. He did not bring any team members with him.
• Management downplays impact: States adequate professional depth exists in each vertical and the resignation will not have much effect. No interim or successor announcement was made on the call.

Guidance & Commitments

Key Metrics