Capri Global Capital: Q2 FY26 Shines with Robust Growth and Strategic Expansion

Capri Global Capital Limited has reported a stellar performance for the second quarter of Fiscal Year 2026, showcasing significant growth across its key financial metrics and strategic business segments. The company, a prominent player in India's retail secured lending space, continues to demonstrate its commitment to capital-efficient growth and operational excellence. This quarter's results underscore a strong trajectory, driven by geographical expansion, enhanced margins, and technology-led transformation.

For Q2 FY26, Capri Global Capital's consolidated Assets Under Management (AUM) soared to 27,040 crore, marking an impressive 40% year-on-year growth and a healthy 9% quarter-on-quarter increase. This expansion was broad-based, with the gold loan portfolio growing by 58% year-on-year to 10,406 crore, and housing loans increasing by 37% year-on-year to 5,972 crore. The Micro, Small, and Medium Enterprises (MSME) AUM also saw an 18% year-on-year rise, reaching 5,602 crore. The company's co-lending AUM surged by 61% year-on-year to 5,677 crore, now constituting almost 21% of the total AUM, highlighting a strategic focus on capital-efficient growth.

The company's Net Interest Income (NII) for Q2 FY26 stood at 480 crore, a robust 57% increase year-on-year and a 15% rise quarter-on-quarter. This performance was bolstered by loan book expansion, improved pricing, and enhanced margin efficiency. Non-interest income also witnessed a remarkable surge of 97% year-on-year and 22% quarter-on-quarter, reaching 203 crore. This growth was primarily fueled by commission income from insurance distribution and co-lending fee income, reinforcing the company's strategy of building a diversified and resilient earnings profile. The insurance distribution business generated a net fee income of 28 crore, while co-lending income contributed 81 crore.

Capri Global Capital's operational efficiency saw significant improvement, with the cost-to-income ratio enhancing to 49% in Q2 FY26, down from 64% in Q2 FY25. This sharp improvement reflects the benefits of a maturing branch network, rising productivity, and strong operating leverage. Despite a 25% quarter-on-quarter increase in operating expenses, partly due to salary increments and bonus payouts, the overall efficiency gains were substantial. The company's pre-provision operating profit surged by 137% year-on-year to 345 crore, leading to a robust Profit After Tax (PAT) of 236 crore, up 143% year-on-year. Return on Average Equity (ROAE) improved to 14.4%, and Return on Average Assets (ROAA) reached 4% for the quarter.

Asset quality remained strong, with impairment costs for the quarter at 31 crore, a decrease from 81 crore in Q1 FY26. The Gross Stage 3 asset stood at 1.3%, down 39 basis points sequentially, while Net Stage 3 was at 0.7%, down 26 basis points. The provision coverage ratio on Stage 3 loans improved to 43%, demonstrating a prudent and conservative approach to risk management. The company's capital and liquidity positions are robust, supported by an equity capital infusion of 2,000 crore in Q1 FY26. The standalone capital adequacy ratio for CGCL is approximately 32.9%, and for Capri Global Housing Finance Limited, it is 26.1%. The leverage ratio remains comfortable at 2.5x, with over 3,200 crore in cash and bank balances, investments, and undrawn credit lines.

Capri Global Capital is well-positioned for continued growth, aiming for 25-30% annualized AUM growth and sustainable ROAE of 16-18% by FY28. The company's strategic initiatives, including product diversification, geographic expansion, and technology leverage, are expected to drive future performance. The management's focus on disciplined underwriting, operational efficiency, and a diversified funding mix provides a strong foundation for sustained profitability and stakeholder value creation. The company's commitment to ESG principles, reflected in its improved Sustainalytics ESG risk rating, further enhances its long-term sustainability and investor confidence.