Value with Growth · Research Note
Capri Global
Holding horizon · 3–5+ yearsTarget: Excellent · ~3 years
“It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
— Warren Buffett
₹232.5
₹22,370.15 Cr
19.89×
3.13×
10.23%
The lender opening new lanes
Capri Global began as a modest finance company and has spent the last few years opening one lending lane after another — loans to small businesses, affordable home loans, money for builders, and most recently gold loans and the distribution of car loans. A lender's product is simple: it rents out money and keeps the spread. The art is doing it fast without doing it carelessly, and Capri has grown its book at a rapid clip, with sales compounding around forty-five per cent a year over five years.
A growing lender at a fair price
Unusually for this list, the price is reasonable in plain terms: about twenty-two times earnings, against a much higher multiple in its own recent past. The market once paid heady prices for the growth and now pays far less, even as the loan book keeps expanding and the return on equity has climbed toward the mid-teens. For a lender growing this quickly, a low-twenties multiple is the sort of fair price for a wonderful-enough business the discipline looks for.
What to weigh
Munger's caution on lenders is worth heeding: a loan book that grows fast can hide its mistakes until a downturn reveals them. Capri's returns on equity, while improving, are still only mid-teens, its interest cover is thin, and like every lender it must keep raising capital to grow — so some dilution comes with the territory. The promoters have trimmed their stake meaningfully over three years, which is worth watching, and a curious side-venture owning a women's cricket franchise is a small reminder to keep an eye on how the company's capital is spent.
What this asks of you
Hold across several years and let a widening, fast-growing loan book compound — that is the case. But lend with the lender's discipline in mind: the risk is credit quality in a slump and the steady need for fresh capital, not the growth, which is plainly there. Buy it for the runway and the fair price, size it for the leverage every lender carries, and judge management by how cleanly the book grows, not merely how fast.