Finance - NBFC · Founded 1985 · www.capitaltrust.in · BSE 511505 · NSE CAPTRUST · ISIN INE707C01018
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Business
Capital Trust Ltd. is an Indian Non-Banking Financial Company (NBFC) that specializes in providing financial services to underserved populations. Its core business model revolves around offering microfinance and Small & Medium Enterprise (MSME) loans, primarily in rural and semi-urban areas of North India. The company focuses on empowering small entrepreneurs, farmers, and micro-enterprises by providing them access to formal credit. Capital Trust makes money through the interest income generated from its loan portfolio, minus its cost of funds and operational expenses.
Revenue Mix
The primary revenue segment for Capital Trust Ltd. is interest income derived from its lending activities. While specific breakdowns can vary, its portfolio is predominantly composed of:
Microfinance Loans: Small ticket loans offered to individuals, often women, for income-generating activities.
MSME Loans: Loans provided to small and medium enterprises for working capital, expansion, or asset creation.
Given its NBFC nature, interest income constitutes the vast majority of its revenue.
Industry
Capital Trust operates within India's highly diverse and competitive NBFC sector. This industry is characterized by a wide array of players, including large diversified NBFCs, specialized lenders, and smaller, regionally focused entities. The sector serves as a crucial credit provider, often reaching segments overlooked by traditional banks. Capital Trust is positioned as a niche player, focusing on microfinance and MSME lending in specific geographic regions (primarily North India). It competes with other microfinance institutions (MFIs), smaller NBFCs, local moneylenders, and to some extent, regional rural banks and small finance banks that target similar customer bases.
MOAT
For a company of its size, Capital Trust's competitive advantages are likely derived from:
Deep Local Penetration & Relationships: Operating in rural/semi-urban areas requires a strong understanding of local demographics, economies, and relationship-building, which can create barriers for new entrants.
Specialized Underwriting: Expertise in assessing creditworthiness for micro-entrepreneurs and small businesses who may lack traditional collateral or credit histories.
Efficient Collection Mechanism: Developing robust processes for loan disbursement and collection in challenging geographies.
Technology Adoption: Potential use of technology to enhance reach, reduce operational costs, and improve efficiency in client servicing and risk management, although this would need continuous investment.
Growth Drivers
Key factors that can drive Capital Trust's growth over the next 3-5 years include:
Financial Inclusion Imperative: Continued government and regulatory push for financial inclusion in India, creating a large addressable market for microfinance and MSME credit.
Underserved Segments: Persistent demand for credit from micro-entrepreneurs and small businesses in rural and semi-urban areas who have limited access to formal finance.
Economic Growth: General economic growth in India, which can stimulate business activity and credit demand in its target segments.
Geographic Expansion: Expanding its operational footprint into new underserved districts or states, leveraging its existing model.
Product Diversification: Introducing complementary financial products or services tailored to its existing customer base.
Risks
Capital Trust faces several key business risks:
Credit Risk: The primary risk is the inability of borrowers to repay loans, leading to non-performing assets (NPAs) and impacting profitability. This risk is inherent in lending to vulnerable segments.
Asset Quality Deterioration: Economic downturns, localized issues (e.g., crop failures), or poor underwriting can significantly worsen asset quality.
Interest Rate Risk: Fluctuations in borrowing costs (for Capital Trust) can impact its net interest margins if it cannot adequately pass on costs to borrowers.
Liquidity Risk: Reliance on financial markets and banks for funding can expose the company to liquidity crunches if access to funds becomes constrained or expensive.
Regulatory & Political Risk: Changes in RBI regulations for NBFCs, lending norms, capital adequacy requirements, or government policies affecting microfinance can impact operations and profitability. Political interventions related to loan waivers can also be detrimental.
Competition: Intense competition from other NBFCs, MFIs, small finance banks, and fintech lenders can pressure margins and market share.
Operational Risks: Risks associated with managing a large number of small loans, fraud, technology failures, and maintaining an effective field force.
Management & Ownership
Capital Trust Ltd. is a promoter-driven company, implying that the founding family or individuals hold significant equity stakes and strategic control. The promoters and key management personnel generally possess experience within the Indian financial services sector, particularly in understanding and navigating the nuances of microfinance and MSME lending. Their expertise in the target geographies and segments is crucial for the company's operational model and risk management. The ownership structure typically features a substantial promoter holding, alongside public and potentially institutional shareholding.
Outlook
Capital Trust operates in a segment with significant growth potential, driven by India's large underserved population requiring formal credit. The bull case rests on its ability to effectively scale its operations, maintain robust asset quality through disciplined underwriting and collection, and leverage technology for efficiency. A stable regulatory environment and continued economic growth would also be favorable. However, the bear case highlights the inherent risks of lending to vulnerable segments, including susceptibility to economic shocks, potential for asset quality deterioration, and intense competition. Regulatory changes, especially any adverse ones, and challenges in raising cost-effective funding could also constrain growth and profitability. The company's future performance will depend on its execution prowess in navigating these opportunities and challenges while balancing growth with prudent risk management.
| #(Fig in Cr.) | Jun 2020 | Sep 2020 | Dec 2020 | Mar 2021 | Jun 2021 | Sep 2021 | Dec 2021 | Mar 2022 | Jun 2022 | Sep 2022 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Revenue | 27 | 27 | 31 | 31 | 23 | 26 | 28 | 28 | 25 | 22 |
| Other Income | 1 | 0 | 0 | -3 | 0 | 0 | 1 | 0 | 0 | 0 |
| Total Income | 28 | 27 | 31 | 28 | 23 | 26 | 29 | 28 | 25 | 22 |
| Total Expenditure | 17 | 17 | 23 | 54 | 34 | 18 | 21 | 16 | 15 | 14 |
| Operating Profit | 12 | 10 | 8 | -25 | -11 | 9 | 8 | 12 | 10 | 8 |
| Interest Expense | 9 | 9 | 8 | 8 | 8 | 7 | 7 | 9 | 7 | 6 |
| Depreciation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit Before Tax | 3 | 1 | 0 | -33 | -19 | 1 | 1 | 2 | 3 | 3 |
| Provision for Tax | 1 | 0 | 0 | -7 | -5 | 0 | 0 | 1 | 1 | 1 |
| Profit After Tax | 2 | 1 | -0 | -26 | -14 | 1 | 1 | 2 | 2 | 2 |
| Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -0 | 0 |
| Profit After Adjustments | 2 | 1 | -0 | -26 | -14 | 1 | 1 | 2 | 2 | 2 |
| Adjusted Earnings Per Share | 0.9 | 0.4 | -0.2 | -10.6 | -5.6 | 0.4 | 0.4 | 0.7 | 0.8 | 0.8 |
| #(Fig in Cr.) | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | TTM |
|---|---|---|---|---|---|---|---|---|
| Operating Revenue | 54 | 120 | 178 | 193 | 154 | 114 | 105 | 103 |
| Other Income | 7 | 5 | 4 | 3 | 95 | 27 | 14 | 1 |
| Total Income | 61 | 125 | 182 | 196 | 249 | 141 | 119 | 104 |
| Total Expenditure | 18 | 39 | 108 | 69 | 176 | 136 | 101 | 66 |
| Operating Profit | 43 | 86 | 74 | 127 | 74 | 5 | 19 | 38 |
| Interest Expense | 12 | 29 | 66 | 76 | 59 | 34 | 32 | 29 |
| Depreciation | 0 | 0 | 0 | 1 | 1 | 1 | 0 | 0 |
| Profit Before Tax | 31 | 57 | 8 | 13 | 14 | -29 | -14 | 9 |
| Provision for Tax | 11 | 19 | 6 | 4 | 9 | -6 | -4 | 3 |
| Profit After Tax | 20 | 38 | 1 | 9 | 4 | -24 | -10 | 7 |
| Adjustments | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Profit After Adjustments | 20 | 38 | 1 | 9 | 4 | -24 | -10 | 7 |
| Adjusted Earnings Per Share | 9 | 15.2 | 0.5 | 3.7 | 1.7 | -9.5 | -4.2 | 2.7 |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Sales CAGR | -8% | -18% | -3% | 0% |
| Operating Profit CAGR | 280% | -47% | -26% | 0% |
| PAT CAGR | 0% | NAN% | NAN% | 0% |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Share Price CAGR | -16% | -29% | -18% | -25% |
| ROE Average | -8% | -7% | -3% | 4% |
| ROCE Average | 5% | 7% | 9% | 14% |
| #(Fig in Cr.) | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 |
|---|---|---|---|---|---|---|---|
| Shareholder's Funds | 161 | 220 | 219 | 151 | 154 | 131 | 121 |
| Minority's Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Borrowings | 32 | 225 | 332 | 476 | 231 | 221 | 202 |
| Current Liability | 49 | 158 | 237 | 28 | 67 | 55 | 32 |
| Other Liabilities & Provisions | -0 | 9 | 16 | -29 | -23 | -30 | -35 |
| Total Liabilities | 241 | 613 | 804 | 627 | 429 | 377 | 319 |
| Loans | 0 | 0 | 0 | 526 | 304 | 243 | 187 |
| Investments | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Fixed Assets | 1 | 1 | 2 | 4 | 4 | 2 | 2 |
| Other Loans | 77 | 195 | 334 | 0 | 0 | 0 | 0 |
| Other Non Current Assets | 0 | 17 | 11 | 2 | 2 | 2 | 1 |
| Current Assets | 162 | 399 | 457 | 95 | 118 | 130 | 129 |
| Total Assets | 241 | 613 | 804 | 627 | 429 | 377 | 319 |
| #(Fig in Cr.) | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 |
|---|---|---|---|---|---|---|---|
| Opening Cash & Cash Equivalents | 27 | 79 | 25 | 14 | 32 | 34 | 39 |
| Cash Flow from Operating Activities | -20 | -334 | -185 | 74 | 252 | 18 | 16 |
| Cash Flow from Investing Activities | -1 | -31 | -1 | -0 | -37 | -0 | -0 |
| Cash Flow from Financing Activities | 73 | 311 | 176 | -57 | -213 | -14 | -49 |
| Net Cash Inflow / Outflow | 52 | -54 | -10 | 18 | 2 | 4 | -34 |
| Closing Cash & Cash Equivalent | 79 | 25 | 14 | 32 | 34 | 39 | 5 |
| # | Mar 2016 | Mar 2017 | Mar 2018 | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 |
|---|---|---|---|---|---|---|---|
| Earnings Per Share (Rs) | 8.99 | 15.15 | 0.55 | 3.7 | 1.73 | -9.54 | -4.18 |
| CEPS(Rs) | 9.13 | 15.31 | 0.73 | 4.08 | 2.09 | -9.31 | -3.98 |
| DPS(Rs) | 0.98 | 0.98 | 0.33 | 0.33 | 0 | 0 | 0 |
| Book NAV/Share(Rs) | 67.38 | 88.2 | 87.57 | 61.01 | 62.36 | 52.77 | 48.66 |
| Net Profit Margin | 37.17 | 31.52 | 0.77 | 4.76 | 2.77 | -20.76 | -9.85 |
| Operating Margin | 79.32 | 71.37 | 41.19 | 46.38 | 47.17 | 3.64 | 17.19 |
| PBT Margin | 56.96 | 47.35 | 4.23 | 6.74 | 8.83 | -25.82 | -13.5 |
| ROA(%) | 15.87 | 8.87 | 0.19 | 1.28 | 0.81 | -5.87 | -2.97 |
| ROE(%) | 25.31 | 20.39 | 0.63 | 4.95 | 2.8 | -16.57 | -8.24 |
| ROCE(%) | 35.81 | 21.2 | 10.96 | 12.86 | 13.78 | 1.02 | 5.04 |
| Price/Earnings(x) | 21.08 | 19.4 | 399.38 | 39.26 | 17.85 | 0 | 0 |
| Price/Book(x) | 2.81 | 3.33 | 2.51 | 2.38 | 0.49 | 1.19 | 1.56 |
| Dividend Yield(%) | 0.52 | 0.33 | 0.15 | 0.23 | 0 | 0 | 0 |
| EV/Net Sales(x) | 7.6 | 8.77 | 5.88 | 3.99 | 1.84 | 2.93 | 3.22 |
| EV/Core EBITDA(x) | 9.53 | 12.23 | 14.2 | 6.02 | 3.85 | 70.58 | 18.24 |
| Interest Earned Growth(%) | 343.72 | 120.52 | 48.13 | 8.2 | -19.83 | -26.27 | -7.74 |
| Net Profit Growth | 0 | 86.99 | -96.37 | 567.63 | -53.36 | -652.75 | 56.2 |
| EPS Growth(%) | 2371.39 | 68.51 | -96.37 | 573.56 | -53.36 | -652.75 | 56.2 |
| Interest Coverage(x) % | 3.55 | 2.97 | 1.11 | 1.17 | 1.23 | 0.12 | 0.56 |
| # | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 66.95 | 66.95 | 64.87 | 64.87 | 64.68 | 54.13 | 54.13 | 54.13 | 54.13 | 54.13 |
| FII | 0.01 | 0 | 0.01 | 0 | 0 | 0.05 | 0 | 0 | 0 | 0 |
| DII | 17.27 | 17.27 | 16.61 | 16.61 | 16.61 | 16.61 | 16.61 | 8.31 | 8.3 | 8.3 |
| Public | 15.77 | 15.78 | 18.52 | 18.53 | 18.71 | 29.22 | 29.26 | 37.57 | 37.57 | 37.57 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| # | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 1.1 | 1.1 | 1.1 | 1.1 | 1.1 | 0.92 | 0.92 | 1.84 | 1.84 | 1.84 |
| FII | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| DII | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 |
| Public | 0.26 | 0.26 | 0.31 | 0.32 | 0.32 | 0.5 | 0.5 | 1.28 | 1.28 | 1.28 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 1.64 | 1.64 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | 3.4 | 3.4 | 3.4 |
| # | 1 Year | 3 Year | 5 Year | 10 Year |
|---|---|---|---|---|
| Sales CAGR | -8% | -18% | -3% | — |
| Operating Profit CAGR | +280% | -47% | -26% | — |
| PAT CAGR | — | 0% | 0% | — |
| Share Price CAGR | -16% | -29% | -18% | -25% |
| ROE Average | -8% | -7% | -3% | +4% |
| ROCE Average | +5% | +7% | +9% | +14% |
| # | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 66.95 | 66.95 | 64.87 | 64.87 | 64.68 | 54.13 | 54.13 | 54.13 | 54.13 | 54.13 |
| FII | 0.01 | 0 | 0.01 | 0 | 0 | 0.05 | 0 | 0 | 0 | 0 |
| DII | 17.27 | 17.27 | 16.61 | 16.61 | 16.61 | 16.61 | 16.61 | 8.31 | 8.3 | 8.3 |
| Public | 15.77 | 15.78 | 18.52 | 18.53 | 18.71 | 29.22 | 29.26 | 37.57 | 37.57 | 37.57 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 |
| # | Mar 2024 | Jun 2024 | Sep 2024 | Dec 2024 | Mar 2025 | Jun 2025 | Sep 2025 | Dec 2025 | Mar 2026 | Jun 2026 |
|---|---|---|---|---|---|---|---|---|---|---|
| Promoter | 1.1 | 1.1 | 1.1 | 1.1 | 1.1 | 0.92 | 0.92 | 1.84 | 1.84 | 1.84 |
| FII | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| DII | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 |
| Public | 0.26 | 0.26 | 0.31 | 0.32 | 0.32 | 0.5 | 0.5 | 1.28 | 1.28 | 1.28 |
| Others | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 1.64 | 1.64 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | 3.4 | 3.4 | 3.4 |
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