Buy Capital First; target of Rs 885: Edelweiss

Edelweiss' research report on Capital First

Capital First (CAFL) clocked decent core operating performance in Q4FY17. NII momentum sustained (up 53% YoY) on strong retail AUM growth (up >33% YoY) and NIMs improvement (loan mix change and capital raising benefit).

Outlook

Factoring in capital raising done in FY17 and consequent upward revision in earnings of FY18/FY19 by 7%/5% we revise our TP to INR 885 (INR 767 earlier). We see risk reward centered around any blip on asset quality. Maintain ‘BUY/SO’.