Prabhudas Lilladher's reserach report on Capital FirstCapital First (CAFL) reported steady earnings with NII growing 45% YoY at Rs2.19 bn (PLe: Rs2.11bn), while controlled provisions enabled 53% YoY growth in standalone net profits at Rs397mn (PLe: Rs402mn). Loan book grew 26% YoY/12% QoQ led by continued traction in retail business, the share of which increased to ~85.8% in total AUMs. Loan growth in two wheeler and consumer durable business continues to remain strong and the segments now accounts for ~20% of retail. CAFL maintains guidance on 25% loan growth while the margins are likely to remain buoyant on better product mix and ease in funding cost. We upgrade to 'BUY' (from Accumulate) with PT of Rs425 (unchanged).Both GNPL and NNPL ratio remained stable at 0.86% and 0.48% respectively (based on 150dpd recognition). The credit cost though continues to stay elevated at ~180bp but is explained by the rising share of high‐yielding consumer durable and two‐wheeler business. CAFL remains well capitalized for growth with CAR of ~20%. We upgrade to 'BUY' (from Accumulate).For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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