Mehabe score: 3 G Factor: 3 Piotski Score: 3 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 3.
Description
Capri Global is a diversified Non-Banking Financial Company (NBFC) with presence across different segments like MSME, Construction Finance, Affordable Housing and Indirect Retail Lending segments.
They Started Construction Finance Business in 2011, MSME lending in 2013 and Housing Finance in 2016. #
Main Points
Product Portfolio
MSME Finance:
Aum: 51% of AUM in FY20 vs 66.8% in FY17
Product portfolio: Business loan against residential/ commercial/industrial properties.
Ticket size: ₹0.05-0.75 crores, with average ticket size of ₹0.16 crores
Tenor: Up to 15 years, with average tenor of 4-6 years
Average LTV ~48%Site:CGCLMain Symbol:CGCL
Stock trades at 544.0, above its 50dma 508.57. It also trades above its 200dma 400.0. The stock remains bullish on techicals
The 52 week high is at 578.70 and the 52week low is at 173.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 32.91% CAGR over last 5 years
Weakness
– Stock is trading at 5.55 times its book value
– has low interest coverage ratio.
– has a low return on equity of 10.74% for last 3 years.
Competition
– The industry trades at a mean P/E of 27.3x. SBI Cards trades at the industry’s max P/E of 109.32x. CGCL trades at a P/E of 53.9x
– Industry’s mean G-Factor is 3.0 while the mean Piotski score is 6.0. CGCL has a G-Factor of 3 and Piotski scoreof 3.
– Average 1 month return for industry is 6.5%. The max 1- month return was given by Bajaj Finserv: a return of 20.21 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 200.0 cr compared to Rs 172.0 cr for period ended Jun 2020, a rise of 16.3%
Operating Profits reported at Rs 140.0 cr for period ended Jun 2021 vis-vis 126.0 for period ended Jun 2020 .
Operating Margins contracted -325.6 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 2.62 compared to Rs 1.55 for previous quarter ended Mar 2021 and Rs 2.26 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 764.0 cr for period ended TTM vis-vis sales of Rs 736.0 cr for the period ended Mar 2021, a growth of 3.7%. The 3 year sales cagr stood at 9.1%.
Operating margins shrank to 72.0% for period ended TTM vis-vis 73.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 183.0 cr for period ended TTM vis-vis sales of Rs 177.0 cr for the period ended Mar 2021, rising 3.3%.
Company recorded a healthy Net Profit CAGR of 10.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 11.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 167% on a 1 Year basis vis-vis a return of 83% over the last 3 Years. – The compounded sales growth on a TTM bassis is 3% vis-vis a compounded sales growth of 28% over the last 3 Years. – The compounded profit growth on a TTM basis is 10% vis-vis a compounded profit growth of 40% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 0.03% vis-vis 0.78% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 20.29% vis-vis 21.36% for Mar 2021
Conclusion
– has delivered good profit growth of 32.91% CAGR over last 5 years – Stock is trading at 5.55 times its book value
– has low interest coverage ratio.
– has a low return on equity of 10.74% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 508.57 and is trading at 544.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
