Choice Equity Broking has initiated coverage on Capri Global Capital Limited (CGCL) with a resolute BUY recommendation, targeting Rs 230 per share with an upside of around 23% from current levels. The research underscores CGCL’s transformation into a well-diversified, technology-driven, retail-focused NBFC, seamlessly balancing margin expansion, operational scale, and cost rationalisation. With gold loans providing robust yield support, and strategic digitisation underpinning efficiency, CGCL emerges as a compelling pick in India’s evolving financial landscape.

Summary of the Investment Thesis

CGCL's core investment thesis rests on broad-based AUM growth, margin expansion driven by higher-yield products, and digital transformation empowering operational leverage. The company’s strategic initiatives in gold loans, MSME, and housing finance segments, underpinned by a robust technology stack, are projected to drive a consolidated AUM CAGR of 30% through FY28. Targeted fundraises and a streamlined cost structure bolster predictions for rising profitability and sustainable growth, making CGCL a preferred NBFC play for investors seeking stable returns.

Key Recommendation and Target Levels

The research house, Choice Equity Broking Pvt. Ltd., unequivocally recommends a BUY on CGCL, with a 12-month price target of Rs 230. This represents a 23% potential upside from the current market price of Rs 187. The valuation is premised on the Residual Income Model, with P/BV multiples at 2.8x for FY27E and 2.4x for FY28E. Bull and bear scenarios suggest price ranges of Rs 260 on euphoric growth and Rs 150 in a downtrend, directing investors towards a favourable reward-risk framework.

AUM Growth and Portfolio Diversification

CGCL has evolved from a single-product, regionally concentrated lender into a multi-product, pan-India NBFC with a fortified balance sheet. Gold Loans now constitute about 36% of AUM, with Housing Finance and MSME segments each holding over 20%. Focused expansion in Gold Loan branches and prudent diversification across states have materially diluted concentration risk, ensuring sustainable scale. The portfolio mix is projected to remain stable over the next three years, anchoring growth.

Digital Transformation and Technology Upside

The company’s robust digitisation drive is pivotal, with Rs 3,000–4,500 Mn invested in bespoke technology platforms over three years. The AI-powered digital onboarding process, real-time credit assessment, and integrated customer engagement matrix have dramatically reduced turnaround times and amplified cross-selling opportunities. This digital first approach enhances efficiency, slashes operating costs, and positions CGCL at the cutting-edge of tech-enabled lending.

Margin Expansion: Higher Yields and Cost Control

CGCL enjoys uplift in blended portfolio yields, led by Gold Loan growth while cost of funds trend downward due to improved ratings. With RBI repo rate cuts and a large proportion of floating-rate borrowings, cost of funds should decline to 9.2% by FY28. Gold Loans—highest yield product—have catalysed blended portfolio margin expansion, while a slower pace of branch additions and digital scale deliver marked cost synergies.

Retail Credit Push and Efficient Fund-Raising

CGCL successfully raised Rs 20 Bn via a QIP in June 2025 at Rs 146.50/share, ensuring access to growth capital minus dilution. Strong CRAR Tier-1 post-fundraise provides a three-year cushion for asset origination. Mutual Funds led QIP subscription, reinforcing investor confidence. Further capital infusion is only forecast post FY28, suggesting adequacy of current capital base for planned scale.

Revenue Streams: Car Loans, Insurance, & Co-Lending

Non-interest income from car loan origination, insurance distribution, and co-lending forms a cornerstone of RoA enhancement. CGCL partners with a dozen banks for car loans; co-lending AUM now >17% of total; insurance distribution contributes 5–6% of NII. These streams provide diversification, reduce risk, and enable superior asset productivity, helping RoA grow from 2.7% in FY25 to 4.2% in FY28.

Financial Projections and Stock Levels

CGCL financials offer an optimistic outlook:

• AUM to grow from Rs 296.5 Bn (FY25) to Rs 505.3 Bn (FY28)
• Net profit to surge from Rs 7,336 Mn (FY26E) to Rs 15,641 Mn (FY28E)
• RoA to improve from 3.1% (FY26E) to 4.2% (FY28E)
• RoE estimated to hit 18.5% by FY28E

Current price: Rs 187. Key levels: Support at Rs 151 (52-week low), resistance at Rs 232 (52-week high). Target: Rs 230. Bull case: Rs 260. Bear case: Rs 150.

Peer Comparison Table

Risks and Mitigants

CGCL faces regulatory, asset quality, and macro risks, with co-lending policy changes and gold price fluctuations as principal concerns. MSME stress and competitive pressures could prompt credit cost spikes and reduce operational leverage, but portfolio diversification and robust risk management provide effective insulators. Investors must monitor regulatory changes and sector trends.

Final Call: Strategic Outlook for Investors

For investors seeking long-term NBFC exposure, CGCL stands out for its scalable, technology-led growth model and prudent risk management. With a well-capitalised balance sheet, expanding top-line and healthy bottom-line prospects, CGCL is well-poised for stable appreciation over the next 8–12 months. Accumulating near current price with a target of Rs 230 aligns with forward-looking portfolio strategies.