Stocks

Broker’s Call: Capri Global Capital (Hold)

| Updated on January 11, 2021 Published on January 12, 2021

ICICI Securities

Target: ₹328

CMP: 350.00

Capri Global Capital (Capri), in its recent business update call, highlighted that while it would remain cautious in growing its construction finance (CF) portfolio (about 22 per cent of AUM) in the near term, its ample liquidity and strong capital position would help grow focussed segments such as MSME, home loans (HL) and indirect retail finance.

The company derives comfort from better collections in HL at 94 per cent, CF at 92 per cent and 100 per cent in indirect retail. While collections remained relatively low in the MSME segment at 81 per cent, improving economic activities in rural and semi-urban regions (Capri’s customer segments) and with about 93 per cent of borrowers paying at least one EMI during the moratorium, it expects MSME collections to improve in coming months.

Further, based on the latest interaction with borrowers, it expects restructuring requests to remain lower. The stock has rerated sharply over past six months, capturing most positives and thus leaving limited scope for rerating.

Going forward, the company plans to increase customer reach in a calibrated manner in existing geographies; branch expansion will be gradual. Maintain Hold with a revised target price of ₹328 (earlier: ₹215).

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Published on January 12, 2021
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