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Capital First: Growth Comes with Rise in Operating Costs - Views on News from Equitymaster
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  • Aug 7, 2017 - Capital First: Growth Comes with Rise in Operating Costs

Capital First: Growth Comes with Rise in Operating Costs
Aug 7, 2017

Capital First announced its results for the first quarter of financial year 2017-18 (1QFY18). The institution grew its income from operations by 31% YoY and the profits by 35.6% YoY during 1QFY18. Here is the detailed analysis of the results.

Performance Summary
  • Income from operations grew 31% YoY in 1QFY17 with a healthy 30% YoY growth in assets under management (AUM). Retail assets comprised 93% of the AUM. Consequently, the net interest income grew by robust 47.7% YoY.
  • Net interest margins moved marginally lower from 8.9% in 1QFY17 to 8.8% in 1QFY18.
  • Net profit for 1QFY18 increased by 35.6% YoY, although the cost to income ratio remained steep above 70%.
  • Gross NPAs came in marginally higher at 1.72% while the net NPA ratio was at 1.04% in 1QFY18 as against 1% in 1QFY17.
  • The capital adequacy ratio of the entity stood comfortable above 19.1% as at the end of June 2017.

    Consolidated financials
    Rs (m) 1QFY17 1QFY18 Change
    Income from operations 6,161 8,088 31.3%
    Interest Expense 2,760 3,065 11.1%
    Net Interest Income 3,401 5,023 47.7%
    Net interest margin (%) 8.9% 8.8%  
    Other Income 57 116 103.5%
    Other Expense 2,675 4,088 52.8%
    Provisions and contingencies 29 57 96.6%
    Profit before tax 754 994 31.8%
    Tax 259 323 24.7%
    Profit after tax/ (loss) 495 671 35.6%
    Net profit margin (%) 8.0% 8.3%  
    No. of shares (m)   97.4  
    Book value per share (Rs)   244.0  
    P/BV (x)*   3.2  

    *Book value as on 30th June 2017

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