CGCL — earnings call

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Questions and answers

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Transcript - Capri Global 3QFY20 Earnings Conference Call is about 2.8% and net NPA is about 1.52% at the end of Q3 FY20. We maintain a strong portfolio yield across all our business verticals.

We have maintained the credit rating of A+ CARE Ratings and AA- of Brickworks amid peer downgrades especially for construction finance lenders.

I will now briefly touch upon the sector outlook and how we are positioned in the current scenario.

We have strengthened our system and process in the challenging environment and have worked towards creating a leaner and agile organization.

At the same time, we are well positioned to immediately benefit from a rebound.

We will however be on the side of the caution, we will be stringent in our disbursements.

Accordingly, we have rationalized our long-term guidance for FY25 and we would like to to build a book of INR 20,000 crore with MSME and affordable housing being our key focus area.

With this I would now like to open the floor for questions.

Pavitra

Thank you sir.

Ladies and gentlemen, we will now begin the question and answer session.

If you have a question please press star and one on your telephone keypad and wait for your turn to ask the question.

If you would like to withdraw your request you may do so by pressing star and one again.

We have first question from Parthiv Jhonsa from NVS Brokerage.

Please go ahead.

Parthiv Jhonsa

Hi Sir, my first question is can you just give the cost of funds from bank borrowings and for NCDs?

Rajesh Sharma

You know, average cost of fund of entire borrowing mix is in the range of about 10.5%.

NCD is also in the same range of about 10.25% and We have no borrowing of short term and NCDs is also for 10 years.

Bank borrowings is in the range of 5 to 8 years.

So, looking at the tenure of the bank borrowing this price is very attractive.

Parthiv Jhonsa

Okay, my second question is the gross and the net NPA for the quarter have increased majorly, especially do you know due to certain segments, so just can you throw some light on it?

Especially because of the housing finance sector, just can you throw some light or can you just elaborate the same?

Rajesh Sharma

So, while the NPA has gone up, but still it remained in the overall range of less than 3% at a company level and in the housing finance at less than 2%.

Parthiv Jhonsa

So, are you confident of closing, are you confident closing the year around this level or it will improve sir from here?

Rajesh Sharma

Our target is to not let this go beyond this level.

I would like to point out that in the segment we operate MSME average yield is about 16% and home loan we have average yield is about 13.5%.

In this range of customer, this kind of NPA levels are expected where new NPAs keep coming and old NPAs keep resolving.

So we don’t see recovery will be a problem as all the loans are collateralized, well secured, it may be good margin where LTVs are lower.

So NPA while it is a classification of accounting, but it does not indicate significant high credit losses.

Parthiv Jhonsa

Okay.

And regarding the entire NBFC sector as a whole, how do you perceive it for the fourth quarter and for FY21 going forward?