/** Title: Capri Loans: AUM Crosses Rs 40,000 Crore as Q1 FY27 Profit Doubles */

Capri Loans: AUM Crosses Rs 40,000 Crore as Q1 FY27 Profit Doubles

Capri Global Capital Limited, widely known through its retail-facing brand Capri Loans, began FY27 with a sharp acceleration in profitability. In Q1 FY27, the company reported consolidated profit after tax of Rs 353 crore, up 102% year on year, supported by rapid balance sheet expansion, stronger spreads, and steady progress on operating leverage.

The quarter also marked an important milestone on scale. Consolidated assets under management rose to Rs 40,112 crore, up 62% year on year and 10% quarter on quarter. The growth was led by gold loans, with continued contributions from MSME lending, housing finance and construction finance. Management also reiterated its long-term ambition to grow AUM to Rs 650 billion by FY28 and to maintain return on equity in the 19% to 21% range.

Growth stays retail-led, with gold as the main driver

Capri’s AUM mix has steadily shifted toward gold loans over the last year. In Q1 FY27, gold loans formed 47.8% of consolidated AUM at Rs 19,179 crore, a 111% year-on-year increase. Management attributed momentum to customer acquisition and rising branch productivity. The gold loan business showed rising average ticket size on portfolio to Rs 191,000 and collateral weight in custody increased to 20.2 tonnes.

The MSME book reached Rs 6,779 crore, up 24% year on year. The company highlighted steady expansion in newer regions and noted that branches opened in Uttar Pradesh are scaling well. Housing finance AUM stood at Rs 7,815 crore, up 42% year on year, with a portfolio skewed toward self-employed borrowers, which management linked to improving yields over time. Construction finance AUM rose to Rs 6,332 crore, up 40% year on year, with 291 live accounts.

A notable strategic aspect of growth is the company’s continuing use of co-lending and direct assignment to expand in a capital-efficient manner. Co-lending and direct assignment AUM stood at Rs 8,126 crore, representing 20.3% of total AUM.

Margin expansion and operating leverage push returns higher

The company’s core earnings strength in Q1 FY27 came from both balance sheet growth and better margins. Yield on net advances improved to 17.0% while cost of borrowings declined to 9.1%, taking spreads up to 7.8%. Net interest margin rose to 9.7%.

Capri also benefited from a sharp decline in the cost-income ratio to 44.2% from 49.4% in Q4 FY26. Operating expenses were broadly flat quarter on quarter even as AUM expanded, indicating early signs of operating leverage from the branch network and technology investments made over the last few years.

Return metrics improved meaningfully. RoAE rose to 19.1% and RoAA to 4.1% on an annualised basis. In the investor communication, the company positioned these return ratios as ahead of its earlier timeline, and management on the earnings call reiterated a medium-term objective of delivering RoAE of 19% to 21% and RoAA of 4.2% to 4.7%.

Fee income becomes more relevant, but quarterly mix moved lower

Non-interest income grew 28% year on year to Rs 217 crore, with contributions from insurance distribution, co-lending income, car loan distribution and treasury. Insurance distribution is positioned as an asset-light income stream and the company reported strategic partnerships with 22 insurers. The presentation also highlighted the digital journey for real-time policy issuance and a two-click buying journey through WhatsApp links.

On the earnings call, management discussed scaling its Capri Care platform with more products and broader distribution, including expansion through a POSP network beyond the lending ecosystem.

Car loan distribution continued to grow. Q1 FY27 originations were Rs 3,283 crore, up 43% year on year. The distribution platform spans 821 locations across 30 states and union territories, with relationships across multiple banks and financial institutions.

Despite growth, non-interest income as a percentage of net income was lower in Q1 FY27 at 22.8% compared with 29.3% in Q4 FY26. The quarter saw co-lending income decline year on year and management attributed this to lower disbursal volumes and changes in co-lending guidelines.

Asset quality steady, with two areas to watch

At the consolidated level, asset quality remained controlled, with gross Stage 3 ratio of 1.1% and net Stage 3 ratio of 0.6% in Q1 FY27. Provision coverage on Stage 3 improved to 43.2% from 41.2% in Q4 FY26.

However, two movements stood out in the quarter.

First, Stage 2 assets rose sharply. Management stated that gross Stage 2 increased by Rs 385 crore sequentially, driven mainly by an increase of Rs 373 crore in the gold loan book. It linked this shift to a quarter-on-quarter decline in gold prices, which affected risk classification even though the underlying product remains short tenor and fully collateralised.

Second, construction finance showed a rise in segmental GNPA to 0.7% from 0.3% in Q4. Management attributed this to one account slipping into NPA and said it had taken around 70% provisioning on that exposure.

Overall credit cost for the quarter was Rs 62 crore, or 0.7% of average total assets, in line with the historical range described by management.

Liquidity, funding diversification and capital position

Capri continued to diversify borrowings. The presentation noted new bank sanctions of Rs 3,868 crore in Q1 FY27 and fund raising of Rs 1,271 crore through NCDs and CPs during the quarter. The lender base was disclosed at 404, with five new lenders added in Q1.

Liquidity was described as comfortable. The company disclosed consolidated net available cash or cash equivalents of Rs 4,037 crore as of June 30, 2026, including cash and bank balances, investments and undrawn bank lines.

On capital, CRAR for the standalone entity was 24.7% in Q1 FY27 and debt to equity rose to 3.7x. While these remain within management’s comfort zone, the trend also reflects how quickly the balance sheet has expanded, making capital planning relevant as the company pursues aggressive growth targets.

Strategy: branch expansion, technology and a higher AUM ambition

Capri’s strategic outlook continues to rest on five themes: broadening product offerings, geographic expansion, technology-led productivity, cross-sell driven fee income, and diversified borrowings.

The company has stated a plan to add 750 to 800 branches over the next two years. On the earnings call, management updated its FY27 plan to around 400 branches, with completion targeted by December 2026. It also spoke about building brand resonance in newer regions, including collaboration with actor Nayanthara as a brand ambassador.

Technology is positioned as a key enabler. Management highlighted extensive use of AI across underwriting and collections and announced a collaboration with OpenAI to bring enterprise-grade generative AI across functions. It also said the company has established a USD 1 billion GMTN program to enable more diversified funding access over time.

Closing takeaways

Q1 FY27 reinforced Capri Global’s positioning as a fast-scaling, retail-focused secured lender. The quarter combined rapid AUM growth with improved spreads and a step-up in returns, while maintaining broadly stable asset quality.

The key monitorables from here are the sustainability of gold-led growth through price cycles, the pace of co-lending migration under evolving guidelines, and execution on the planned branch ramp-up without eroding operating efficiency. Management’s revised AUM guidance of Rs 650 billion by FY28 raises expectations, but Q1 FY27 shows the company entering that run-rate with stronger profitability than it had initially targeted.