Capital First: Winner all the way!

V Vaidyanathan-led Capital First is up 5.27% by Rs. 20 and is currently trading at Rs. 413 per share, on back of strong volumes. In first 90 minutes of trade, over 2.6 lakh shares have changed hands, on BSE and NSE combined, against 2 week average daily volumes of close to 1.5 lakh shares.

Capital First, specializing in retail and MSME financing, declared 13.0% QoQ higher net interest income at Rs. 175 crore for Q3FY15, despite only 9.1% rise in total interest earned, aided by cheaper borrowing cost. Company’s third quarter net profit rose 10.6% to Rs. 29.91 crore, resulting in Q3 and 9mFY15 EPS of Rs. 3.60 and Rs. 9.39 respectively, surpassing FY14’s full year EPS of Rs. 7.40 comfortably in the first 9 months itself.

With AUM of over Rs. 11,600 crore, company has 84% of its loan book composed of retail loans. While it is bullish on housing loans and SME financing business, company has decided to exit from the gold loan business. Its asset quality remains Impeccable with net NPA of 0.01% and capital adequacy ratio very comfortable at 20.2%. At current market price of 413, PBV of 2.7 times is attractive, given the 75% growth rate in earnings for the current year.