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DRChoksey Report
DRChoksey has initiated coverage on Capri Global Capital Ltd. with a 'Buy' rating and has set a target price of Rs 316, implying a potential upside of 23% from the current level as mentioned in the report of Rs 256.
According to the brokerage, the NBFC is at an inflection point, with its gold-loan franchise moving from branch-led expansion to a more scalable, volume-driven model.
The brokearge sees three structural drivers supporting the next leg of growth: rising customer and branch productivity, sustained operating leverage as the existing cost base scales, and increasing use of co-lending to improve capital efficiency.
Together, these should allow Capri Global to compound AUM at a healthy pace while sustaining strong returns and limiting the need for incremental equity capital.
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While established gold-lending leaders remain formidable competitors, DRChoksey believes Capri Global is increasingly playing the game smarter, with a differentiated growth model built around productivity and capital efficiency.
However, given the relatively limited seasoning of its gold-loan book and the need to establish the durability of its returns through a full gold-price cycle, the brokerage remains measured on valuation.
DRChoksey has assigned 2.5x FY28 ABV, at a discount to Muthoot's 3.5 times but at a premium to Manappuram, reflecting Capri Global's 19-21% RoE and ~30% AUM CAGR.
The discount to Muthoot captures the relatively limited seasoning of Capri Global's gold-loan franchise, the need to establish the durability of its returns through a full gold-price cycle, and the concentration risk inherent in its predominantly single-product franchise.
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