Capri Global Capital Ltd Q1 FY2027 Concall Summary

Key Takeaways

• Record PAT, gold-led quarter: PAT doubled YoY to ₹353 cr, the highest ever, as gold loan AUM surged 13% QoQ despite a gold price correction and branch productivity jumped to ₹19 cr per branch.
• AUM guidance revised upward: The FY28 AUM target was raised to ₹65,000 cr from an earlier undisclosed level, implying a 30%+ CAGR, with gold loan branch rollout accelerated to 400 dedicated branches by December 2026.
• Spreads widened on mix and yield shift: Blended spreads hit 7.8%, helped by a deliberate pivot to smaller-ticket, higher-yield gold loans and a rising share of self-employed customers in housing finance.
• Co-lending hit a regulatory speed bump: New CLM1 guidelines slowed co-lending volume growth to 4% QoQ and pulled income down 8% YoY, though 6 of 11 partners have already migrated.
• What to watch next quarter: Whether the 150 new gold loan branches open on schedule, the promised 50-75 bps gold loan yield uplift materializes, and any further slippages in construction finance after the one account that pushed GNPA to 0.7%.

Gold Loan Engine: Growth, Yields & Asset Quality

• Branch productivity leap: AUM per branch rose to ₹19 cr from ₹17 cr QoQ as branches added in FY26 matured, while AUM per employee nearly doubled YoY to ₹3.4 cr because headcount grew only 14% against a far larger AUM expansion.
• Yield uplift strategy: Yield improved to about 18.5% after the company shifted focus to smaller ticket sizes and redesigned incentive plans to drive that mix, with another 50-75 bps improvement expected next quarter.
• Stage 2 spike is mechanical, not credit stress: Gold loan Stage 2 rose ₹373 cr because a 4% QoQ gold price decline pushed more accounts past the threshold; management flagged this as low-risk and noted automated margin calls trigger when LTV breaches 85%.
• Risk buffer at origination: Disbursements carry a 29% margin (71% LTV), which management considers ample even if gold prices fall further, though a sustained decline could weigh on growth.
• Branch rollout accelerated: The dedicated gold loan branch target was revised from 350 to 400, with 150 planned in Q2 and the full count operational by Q3 FY27.

Sharma: "In any case, we have seen that on a stable basis, gold loan growing at 25% is absolutely possible."

Diversification Bets: MSME, Housing & Construction Finance

• MSME disbursements up 32% YoY to ₹616 cr, led by steady execution and network expansion, though its share of overall AUM has declined as capital allocation prioritized gold loan branch profitability.
• Uttar Pradesh MSME branches are scaling well, delivering ₹18-20 cr in monthly disbursements, while 16 new branches in Telangana and Karnataka are set to go live from Q3 FY27.
• Housing finance grew 42% YoY to ₹7,815 cr, with yields improving as the self-employed customer mix reached ~75% of AUM; 30-plus branches opened in Andhra Pradesh, Telangana and Karnataka last quarter to diversify geographically.
• Construction finance up 40% YoY to ₹6,332 cr, granular and secured, but one account slipped into NPA during the quarter, pushing GNPA from 0.3% to 0.7%; a 70% provision was taken and management expects recovery within 6-9 months, citing a ₹30 cr recovery from an old NPA account in the same quarter.
• DCCO cases of ₹125 cr remain outside GNPA and are still classified as standard.

Spreads, Margins & Operating Leverage

• Spread expansion to 7.8% was driven by the increasing share of high-yield products, the gold loan yield uplift, and a ~10 bps decline in cost of funds during the quarter.
• Cost-to-income improved sharply to 44.2% from 49.4% QoQ as operating leverage kicked in: opex was flat QoQ with only 156 employees added, reflecting branch optimization and technology investment.
• Management expects spreads to hold around 7.8% and could touch ~8% once the gold loan proportion crosses 50%-53% of AUM; cost-to-income is guided to stay in the 44%-45% range over the next 12-18 months as new branch expenses are offset by volume from mature branches.
• Cost of funds is seen as stable for the remainder of FY27 with limited scope for further reduction from current levels.

Co-Lending & Fee Income: A Mixed Quarter

• Co-lending volume growth decelerated to 4% QoQ as new regulatory guidelines required partner banks to migrate to the CLM1 model; income fell 8% YoY to ₹65 cr on lower disbursals.
• Migration is underway: 6 of 11 partner banks have already moved to CLM1, with tech integration completed for new arrangements, suggesting the drag may ease as the remaining partners transition.
• Car loan distribution grew 43% YoY in originations to ₹3,282 cr, but volumes moderated as management refused to chase growth at the cost of unit economics, stating every transaction must be profitable.
• Insurance fee income is being positioned as a growth lever: 14 new life and general insurance products were launched, the POSP network was expanded for open-market distribution, and a digital-first approach is expected to meaningfully enhance fee income over time.

Sharma: "There are some players who do the cash burn and grow their volume, but we are following a philosophy not to do the cash burn. And every transaction should result in some profitability. And we will not chase only growth. Growth has to be along with profit."

AI & Technology: Building a Compounding Moat

• OpenAI collaboration aims to build an AI-native lending institution, with secured AI-powered deployments and workflow tools to be explored across customer service, knowledge management and branch operations in coming months.
• Kronos 4.0 AI collection platform is now deployed across the entire collection portfolio, while a multi-lingual AI voice platform operates in 9 Indian languages.
• Data flywheel in motion: Over 2.64 lakh geo-tagged field visits were recorded during the quarter across sales, credit, technical evaluation and collections, feeding a data ecosystem that management argues creates a compounding technology advantage with every customer interaction.
• Micro-LAP risk upgrades now use data science, including BRE and bureau scorecard criteria, to disqualify non-eligible customers upfront at sourcing.

Sharma: "Together, this creates a continuous expanding data ecosystem where every transaction and every field interaction feeds back into AI models. Then AI volume scales the platform, becomes progressively smarter, enabling faster decisions, stronger risk management and improving operating efficiency, creating a compounding technology advantage that strengthens with every customer interaction."

Leadership & Governance

• CEO position: When asked about CEO churn and a vacant position, management stated flatly there is no vacancy and no plan to bring in a CEO.
• HFC subsidiary scaling: The Head of Internal Audit, CCO and CFO were transferred from the NBFC to the housing finance subsidiary after it crossed ₹5,000 cr in AUM, per RBI regulations requiring a separate CCO and CFO.

Sharma: "There's no CEO position vacant. And there is no plan to bring any CEO."

Guidance & Commitments

Key Metrics