Capri Global Capital Ltd (NSE: CGCL) Q4 2025 Earnings Call dated May. 07, 2025
Corporate Participants:
Unidentified Speaker
Hardik Doshi — Corporate Finance & Investor Relations
Rajesh Sharma — Managing Director
Rajneesh Singhvi — Vice President
Analysts:
Unidentified Participant
Sohail Kalani — Analyst
Mayank Mestri — Analyst
Satyaprakash Pandey — Analyst
Shalin Kapadia — Analyst
Shreepal Doshi — Analyst
Bhavin Pande — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the KPRI Global Capital Limited Q4FY25 earnings conference call hosted by Goindia Advisors. As a reminder, ladies and gentlemen, good day and welcome to the K3 Global Capital Limited Q4FY25 earnings conference call hosted by Goindia Advisors. As a reminder, all participant line will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing 7.0on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Hardik Doshi from Capri Global Capital Ltd. Thank you. And over to you sir.
Hardik Doshi — Corporate Finance & Investor Relations
Hi, Good afternoon everyone and welcome to Q4FY25 earnings call for Capri Global Capital Limited. This is Hardik Doshi, Head Corporate Finance and Investor Relationship. Let me read out the disclaimer for today’s call. Today’s call regarding Capri Global Capital Limited’s earning performance will be based on judgment derived from the declared results and information regarding business opportunities available to the company. At this time, the company’s performance is subject to risks, uncertainties and assumptions that could cause results to differ materially in future. Given these uncertainties and other factors, participants on today’s call may observe due caution while interpreting the results.
The full disclosure is available on Slide 41 of the Earnings presentation. Participants are requested to take note of the same. With us today on the call we have Mr. Rajesh Sharma, Managing Director of the company, Mr. Parsa Chakraborty, Chief Financial Officer Mr. Sanjeev Srivastava, Chief Risk Officer and Ms. Divya Sutta, Director Business Strategy. Let me now request our Managing Director Mr. Rajesh Sharma to present the opening remarks over to you sir.
Rajesh Sharma — Managing Director
Good afternoon everyone and I hope you all are doing very well. We announced our audited financial results for the fourth quarter and full year ended March 31, 2025 on May 5th. I trust you have had an opportunity to review the earnings presentation which is available on our website. I am pleased to report that Capri Global Capital has closed FY25 on a strong note. Delivering our best financial performance backed by robust growth across our core segments while maintaining disciplined risk and cost management. Our strategic focus on under penetrated customer segments backed by a digital approach and operational excellence continues to yield tangible results.
We have expanded meaningfully across all our core businesses. MSME affordable housing, gold loan and construction finance. With over 1111 branches and a growing base of more than 7 lakh customers, our reach into TA2 to TA4 markets have never been so stronger. Alongside our lending business we have also seen strong progress in non interest income streams which together contributed more than 27% over net income for FY25. Led by insurance, distribution and car loan originations. These asset light income streams enhance our capital efficiency and provide high ROE upside while enabling deeper customer engagement. Technology continue to be our core enabler from loan origination to collection, our in house develop end to end digital journey including application for sales mobility called Pragati app for customer app called Capri, Loan App, collection app called Collect Express and Loan Express for valuing a property our technical app and is delivering faster turnaround times and deeper customer insights.
In the Gold Loan segment we have operationalized rapid sub 30 minute disbursal with fully digitized customer journeys and AI powered security infrastructure. Our use of advanced data science including AI and machine learning based underwriting, scorecards, risk based pricing and real time collection dashboards is driving sharper portfolio performance and enhancing operational productivity. I shall now move to the commentary on business and earning performance. We closed FY25 with strong momentum delivering a consolidated AGM of Rs. 22,857 crores marking a robust 46% year on year growth. This performance reflects the the success of our diversified strategy across secured retail lending segment.
The Gold loan business continued to scale at an accelerated pace supported by a strong branch network and a seamless digital experience growing over 130% year on year. Our housing friends vertical also maintain its upward trajectory driven by healthy demand in affordable housing across tier 2 tier 3 cities posting over 24% growth during the year. Our disbursement for Q4FY25 stood at rupees 8389 crores, growing by 41% year on year basis. Notably, our portfolio remains largely retailed and fully secured with over 100% of the book backed by collateral. Underscoring our disciplined approach to risk and our commitment to financial inclusion through responsible credit, our CO lending platform continues to demonstrate strong momentum and strategic relevance.
Age of FY25, our co lending AUM stood at Rupees 4079 crore accounting for approximately 18% of our total AUM compared to 12% a year ago. We have meaningfully enhanced the acceptance ratios and and throughout across CO lending programs by streamlining our onboarding and credit assessment workflows. CO lending remains an efficient tool for high ROI generation, capital conservation and liability diversification. We continue to build a well diversified and secured retail portfolio with MSME and Housing Finance together comprising 46% of our total AUM. As of March 2025 MSME AAM stood at rupees 5278 crores while Housing Finance AUM reached Rs.
5202 crore rupees growing 24% year on year. MSME growth is being supported by the scaling of Microlab across 84 branches. Both segments maintain an average disbursal ticket size in the range of 22 lakh ensuring graduality and asset quality. With a continued focus on underserved markets and backed by tech enabled credit underwriting and branch expansion, we expect sustainable growth ahead in these segments. Our gold loan AUM grew sharply to Rs. 8042 crore rupees in FY25 reflecting a robust 130% year on year increase driven by strong customer demand and rapid branch level scale up. With a network of 803 specialized branches across 10 states, we have achieved an average AUM per branch of Rs.
10 crore where over 95% of branches are passing Rs. 5 crore of AUM. The business continues to benefit from a fully digital loan journey, AI powered security system and high customer retention with repeat customer accounting for over 50% of the portfolio. As we deepen our geographic footprint and scale through CO landing tires, we expect Gold Loan to remain a high growth and high yield contributor to our secured lending portfolio. Our Construction Finance AUM grew to Rs.4133 crores marking a strong 58% year on year increase supported by sustained demand in the residential real estate market and a healthy pipeline of affordable housing projects.
We maintain a granular and well diversified book comprising over 282 live projects with an average sanction ticket size of Rs. 2.7 crore. The business continues to focus on mid sized residential developers in metro and tier 1 cities offering construction linked funding solutions through a robust diligence and escrow based repayment and monitoring mechanism. Let me now provide an update on our core earnings. Our yields and spread expanded further in the quarter to 17.3% and 7.8% respectively primarily on account expansion in yields for Housing loan and Gold Loan. Our net interest income for Q4FY25 reached rupees 381crore marking a 49% year on year increase and FY25 reached at rupees 1,332 crore rupees marking a 35% year on increase driven by margin expansion and robust growth in our loan book.
Our non interest Income continued to scale meaningfully in FY25 contributing nearly 27% of our net income. This growth was led by three strategically important vertical car loan distribution, co lending and insurance. Our car loan origination business generated rupees 96 crore in net fee backed by disbursement of Rs.10,700 crores. With a presence across 803 locations in 31 states and union territories and partnership with 12 banks and NBFCs, we have established ourselves as a key sourcing partner in this space offering speed, reach and consistent volume in insurance. We tied up with 18 leading insurers across life, health and general categories and close the year with a net fee income of rupees 73 crore.
Our focus on digitally enabled embedded insurance journeys and cross sell initiative, especially in Tier 2 and Tier 3 markets will drive this income stream going forward. Meanwhile, co lending income stood at rupees 165 crores supported by rising disbursal volume and partner banks. Together these fee driven vertical are creating scalable capital efficient growth level levers and enhance operating leverage and deepen customer relationship across the platform. Our distribution network remains a key in areas of scale and reach with our branch count expanding to 1111 and employee beam base crossing 11,400 by the end of 525. Having made such significant upfront investment in physical infrastructure over the past three years, our current priority is to drive higher productivity per branch and extract benefit of economies of scale.
This shift is already yielding results with our cost to income ratio improving meaningfully from a peak of 70.5% in Q4FY24 to 54.8% in Q4FY25. We expect this trend to continue as our branch network matures, tech adoption deepens and operating scale improve across core lending verticals. As a result, our pre provisioning operating profit increased significantly by 132% year on year to Rs.254 crore rupees for Q4FY25 and by 61% to Rs.734 crore for FY25. Our asset quality continues to hold steady supported by the secured nature of our portfolio and measured approach to risk. During the fourth quarter credit costs remained well contained at rupees 18 crores with full year number at rupees 101 crore rupees.
In line with our expectation, we saw a steady improvement in Delinquencies with Gross Stage 3 assessed at 1.5% ending Q4FY25 versus 1.9% year on year and Net Stage 3 0.9 ending Q4FY25 versus 1Point1% year on year. We have maintained a provision coverage ratio of 41.7% on stage three loans reflecting our prudent stance. These outcomes are a result of consistent efforts in strengthening our collection system using sharper risk filters at origination and ensuring closer monitoring. As we scale, we continue to maintain a strong liquidity position for more than rupees18.27 crores through cash and cash equivalent and undrawn credit lines across CGCL and CAJFL.
During FY25 we got new credit lines of Rupees 7625 crore sanctioned for CGCL and CGHFL. Our capital adequacy ratio for both CGCL and CGHFL remains strong in student 22.8% and 26.9% respectively. Our continued focus on scaling high margin businesses and focus on cost efficiency is now reflecting in our bottom line. In Q4FY25 our consolidated net profit rose to rupees 178 crores an increase of 115% year on year and 39% quarter on quarter. For the full year profit is two days rupees 479 crores up 71% from the previous year. These gains also translated into improved returns ratio with ROE and ROE for the quarter at 16.9% and 3.6% and of 12.6% and 2.8% for the FY25.
In addition to enhancing our in house development applications, we are making investments in implementing generative AI for better underwriting assessment, fraud detection and cost efficiency. We continue to strengthen our collection process through using data analytics for channel location strategy based on customers past repayment behavior, monitor real time collections, optimize route maps for field agents and use AI based live tracking for higher productivity. This has resulted in robust average collection efficiency of around 99%. Lastly we continue to focus on driving improvement in turnaround time enabling us to meet our customers expectations faster through hassle free and timely disbursements.
ESG continue to be a core enabler for long term strategy embedded across operations, governance and stakeholder engagement. This year we were recognized with an S and P Global Corporate sustainability assessment score of 49 well above the industry average of 30 and ranked in 99 percentile globally on financial inclusion with a score of 75 a reflection of our deep commitment to underserved markets. On the environmental front we have adopted responsible E waste practices, invested in low carbon digital infrastructure and aligned operations with the UN Sustainable development goal. Socially, we continue to foster the inclusive, safe workplace through training, wellness and diversity programs.
On the governance front, we have put in place robust oversight framework guided by a well balanced board and external expertise ensuring that our decisions remain transparent, accountable and in the long term interest of all stakeholders. With that I conclude my opening remark. We shall now take the question.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sohail Kalani from ULJK Financial Services Ltd. Please go ahead.
Sohail Kalani
Good morning sir. Very good. Congratulations on a good set of numbers. The first question I have is about our loan book growth. We have grown at a very high rate and we’ve reached an 8,000 Kurka Ium in the last few years from 2022. So how would you say the journey has been? How have we been able to accelerate this growth at this rate?
Rajesh Sharma
So you have seen that we added the capacity and capability both capability by putting our collection processes automation and driven by data science tools and invested on our training and giving imparting how to use these tools on our 525/people in the collection investing. On the technology side we set up a Tech center of 150 people on the technology side and 25 data scientists and on capacity wise we have expanded branch network and added the more product. So growth is coming because of all these reasons. And I think our branches which were if you look at four years ago it was just 120 which is now 1111.
So because of those expansion and upfront investment done they have started yielding the results.
Sohail Kalani
Got it, got it, got it. And also in terms of you know the business for branch we are at around 9 crore per branch right now. That itself is, you know much more higher than the competition. So any comments on that?
Rajesh Sharma
You mean the brand the competition is having higher or we are having higher?
Sohail Kalani
We are having.
Rajesh Sharma
Okay, so our per branch gold loan aum is almost now March is in the range of about 10 crore rupees. And I think it is because of that the right selection of the branches and right way of servicing the customer. So he keep coming for repeat business by building the digital journey. And also our customer service which is quite transparent where without using pen and paper entire Disbursement happens. I think because of that we are able to build this AUM and I see there is a lot of potential still exist ahead on ground to continue to remain on this growth path.
Sohail Kalani
Thank you sir. That’s all from my side.
operator
Thank you. The next question is from the line of Shalin Kapadia from IIFL Capital. Please go ahead. Mr. Shailan, I would request you to unmute your line and speak please. Due to no response from the current participant, we will move on to the next participant. The next question is from the line of J. Mistry from Equity Securities. Please go ahead.
Unidentified Participant
Thank you sir for the opportunity. Am I audible?
operator
Yes, sir.
Unidentified Participant
Okay, thank you for the opportunity and congratulations on great set of numbers, sir. So I had two questions. The first question was on the yields of the gold loan which are now at approximately 22% levels. So like with competition increasing and there’s some regulatory scrutiny also hovering. So how does a CGCL retain would help would be retaining such yields in the current environment and like to maintain these yields would we be anyway compromising on LTV or asset quality friend for the coming future? That was the first question and on the second question so we are seeing that our construction finance vertical has seen a quite uptick in the last couple of quarters.
So like what would be the key driver for this acceleration? Like are we adding new developers or is it because of penting up of demand or something? So those are my two questions sir. Thank you.
Rajesh Sharma
So regarding the yield of the gold loan, I think more the retail portfolio we build, the yield can be around that level. Of course it depends on the overall market as well as the demand and underlying interest rate scenario. But in near future we don’t see any sharp decline in our ROI of the gold loan offering and whether these are high or will it impact our future growth. If you look at the some of the competition, they are in the similar range and depend on the company to company, what strategy they drive and how they want to do it.
But it has no direct impact and bearing in relation with the asset quality or LTV because LTV is about 71% which is overall ceiling of 75% within that. And as regard asset quality, you have seen that now our gold loan portfolio is average maturity is not more than six months. So every loan is getting close within that period of time and those impact is coming if there are any asset quality issues. So we have seen that asset quality have been remained very stable. So there is no surprises on that part. Coming back to Construction finance, the book Is still in the about 4,100 crore rupees and a couple of last quarter we have seen that there was a lot of good demand in terms of terms of realization and the sale of those projects.
And we are seeing the good traction. But in overall construction finance will always remain on a consolidated level not more than 20%. So by following that, while the growth has been good, so is the collection, so is the asset quality. And that gives the confidence that overall if the economy continue to grow this construction finance will also continue to grow by maintaining a healthy book.
Unidentified Participant
Thank you. So those were my questions.
Unidentified Speaker
Thank you. The next question is from the line of Mayank Mestri from GM Financial. Please go ahead.
Mayank Mestri
Hi sir, I had two questions. First is that our geographical presence seems more focused on North. So is it because that the competitive intensity is high in south or our only focus is on north or should we see the company expand its wings in south going forward? And my second question is that in the gold on book how much would be our consumption led and how much would be income generation? Because as per latest guidelines I think there would be some more, you know, difficulties in the consumption led loans. So would you throw some light on on.
On this?
Rajesh Sharma
Yes, Mayank. So as regards our expansion strategy it is very clear that we are so far have been very active in north and west. But recently we have entered in the south by opening microlab branches. This year we will be entering in the south by adding more housing finance, MSME and gold loan branches. So in the second half you will see that these segments will have the branch network in southern Andhra, Telangana, Tamil Nadu, Karnataka. So we grow in that segment also that geography as well. Now coming to bifurcation of the gold loan between the self employed non professionals or for the purpose of consumption or for the purpose of business.
So while exact data I may not be able to give you right now. But by and large these people who borrow money they are running some kind of a business. Now at the moment we are tracking that whether he is using the money for business purpose or consumption purpose. Of course now the new guideline has come. But essentially all these loans are taken by some micro entrepreneur. And how many percentage going business that is not yet trackable. Now once the guideline which are draft finally get notified we will adopt in our underwriting norm and underwriting standard as well as the customer onboarding process.
Noting that for what purpose is borrowing the money and that time probably we’ll get the precise numbers.
Mayank Mestri
Okay. Okay sir. And one more question is on the car origination So I would like to know how is the risk split in this business? I mean does the CVCL take the whole, you know, risk in its book and while the fund is being disbursed by the bank or how does this business work? Exactly.
Rajesh Sharma
So this is. This is a pure fee vertical where we just originate the lead and share. There is no capital involved, there is no risk involved. So there is nothing. You purely get the fee income. The loan disbursement is decided by the bank. Their underwriting rule. Our job is to just generate the lead and share with them. They say pension or they reject it. It is up to them. But every case which is sanctioned and disbursed, we get to gain the ability our fees or that origination. This is a pure DSA agreement.
Mayank Mestri
Okay. Okay sir, that clears a lot of my question. Thank you.
operator
Thank you. The next question is from the line of Satya Prakash Pandey from Heathong Securities. Please go ahead.
Satyaprakash Pandey
Hi. Am I audible?
operator
Yes sir.
Satyaprakash Pandey
Yeah. So I have two questions. First, is your spreads improved quarter and quarter due to higher yields. But cost of fund is gradually rising approximately 9.5%. What’s your view on the spread sustainability if systemic liquidity tightens further or if credit rating don’t improve material?
Rajesh Sharma
So cost of fund I think is already this year we’ve seen that Reserve bank of India has started releasing the liquidity and rates have gradually repo rate have come down. We clearly see there is no signal of interest rate going up based on these indicators. And we believe that rates will soften on our incremental borrowing. And in regards the rating upgrade, now annual results have come out. We will approach the rating agency and they will take you what is where it fits into. So interest rate going up. If there is no scenario in case we get reading upgraded of course then there will be risk weighted change.
And of course incremental borrowing on immediate basis will get our cost of funds come down on existing borrowing. Whenever the interest loan get reset happens, that is the time when the interest rate is reset for the lower side being upgrade of the rating.
Satyaprakash Pandey
Okay, that’s helpful. My second question is can you break down the internal movement of accounts between stage one, two and three for the past three quarters. What sector or geographies are seeing higher migration risk and how are you adjusting underwriting filters accordingly?
Rajesh Sharma
So I will ask my colleague Rajneesh to take this question up. So stage one and two gross is around. Numbers are in millions.
Rajneesh Singhvi
So it is 1:84,917. So if you, if you refer to the slide number 26 of the. Yeah.
Rajesh Sharma
So should I call out numbers?
Satyaprakash Pandey
No, thank, I will have that. I’ll take it from there.
Rajesh Sharma
Okay, so if you refer to the slide number 26 of the earnings presentation, there is a detailed breakdown of stage one, two and three along with the ECL provision for each of the stages for the last five quarters including PCR and.
Satyaprakash Pandey
Thank you so much. That is from you sir. Thank you.
operator
Thank you. The next question is from the line of Charlene Kapadia from IIFL Capital. Please go ahead. Mr. Charlene, I would request you to unmute your line and speak please.
Shalin Kapadia
Hello, Am I audible?
operator
Yes sir. Please continue.
Shalin Kapadia
Okay, yeah, sorry about that. I have two questions please. So with increasing digitization how are you addressing the emergency risks such as algorithmic bias in the credit scoring model or cyber security threats in loan disbursal and repayment ecosystems? And secondly sir, in a scenario where RBI further tightens the norms on LTV or coal ending exposure, what contingency frameworks are in place to preserve margins, liquidity and dispersal momentum without raising the risk thresholds?
Rajesh Sharma
So I’ll take the second question first is regarding the co lending. Recently RBA had come out with a draft guideline. It’s talk about how the LTV should be calculated and what are the other measures in terms of whether the end use of the loan other aspect is to be done. So if you talk about LTV related norms on the gold loan I think that is going to benefit the overall sector everybody where LT will become little conservative for the bullet repayment loans. As regards the other aspect I think that is only improving the compliance that is not going to reduce the demand or the cost part of it.
Of course initially once the new guidelines comes on the technology side with our banking partner some alignment between the to organization about the technology platform of API and other has to be done but that is not going to change the earnings and the rate of interest and how the customer is serviced that is more the compliance and more on the customer being given the joint statement and the common yield and all that. And as regards the increased digitization and cyber security threat I think we already have engaged our consulting partner which include KPMG and BCG on the technology side and we are using a few vendors to meet those requirements on a continuous basis.
Recently we have appointed internally ENY is accounting firm and assignment to strengthen the overall system. So there is ongoing now technology is going to be not a one time affair. It is in continuous basis getting changed, getting upgraded and keep on going. So I Think if you see that we are spending close to about 90 to 100 crore rupees a year on our technology, data, science and other teams on this aspect. So we are heavily invested on this and that becomes a part of it. No need to specially focus that something has to be done.
It is an ongoing affair about upgrading based on the recent trend guidelines and regulations.
Shalin Kapadia
Thank you sir. That was very clear.
operator
Thank you. The next question is from the line of Sripal Doshi from Equidistant Securities. Please go ahead.
Shreepal Doshi
Hi sir. Thank you for giving me the opportunity sir. I joined a little late so had this question on ltv. I don’t know if you’ve already answered. So within gold there are a couple of trends that are that are emerging. Firstly the ticket size that we are targeting is inching upward. Secondly also the LTV now typically with this new regulation coming in wherein the regulator is asking to have A you know, 75% LTV being monitored throughout the loan tenure. And yet our LTV has increased during the quarter. So just wanted to understand the implication of these LTV norms by the regulator.
And also our strategy on ticket size within gold going ahead.
Rajesh Sharma
So our ticket size the gold is going to demand more or less so granular that it will be in the range of one lakh rupees only. And it is not going to change dramatically. Second thing is that about ltv now the RBI is saying that in bullet repayment cases these are the graph guidelines. You must calculate the interest which is going to accrue is a part of ltv. Thereby it means that your load amount will be on the lower side. So LTV will get effectively reduced to that extent. So overall it is a positive for while the gold have not depreciated in a drastic manner.
But whenever in future it happens at least create the extra safety buffer LTV for the these kind of loan to value loans since it is being applied to overall everyone. So the entire gold loan lending sector will adjust to these regulations and it is not going to have a long term impact. Maybe initially you have to adjust it. But since being these loans are always getting reset in four to six months and loaners getting four foreclose because 10 years are not longer, it is not going to have a longer impact. Had These loans been 1012 years due to adjust it create a case of recovering that kind of amount to bring that LTV down.
But being these are shorter tenure of loans, it doesn’t pose a risk. So I believe the entire sector will adjust to these norms.
Shreepal Doshi
Got it. So just One follow up here with respect to. So what percent of our book would be gold book would be this bullet repayment book.
Rajesh Sharma
So I. I do not have exact number as of now in case you require. You can. You can take it out and give separately. But we run various schemes where the interests are also offered monthly by choice or by options or by design. And some of the cases are on a bullet repayment basis. But that bifurcation is not available because we are not segregated that way it is required specific we can carve it out and give it to you.
Shreepal Doshi
Got it. So just from the like more from the trend perspective rather than from number perspective here. So the question is that at system level would you. Would you say that majority of the loans that the NBFCs are doing would be more or less bullet repayment as an option? And one more clarification that I needed here. So when they say bullet repayment, is it like anybody paying? Anybody paying, you know, interest component at let’s say even if it is a 12 month annual product and if the customer makes interest repayment to me, let’s say at the sixth year end, six month end, even that will be classified as a bullet repayment only.
Right?
Rajesh Sharma
So to give the precisely your answer, there are various options and schemes customer have to choose. And if the loan has been given on a monthly repayment basis and it doesn’t pay any pay of the bullet, that will not classify as a bullet repayment scheme. Bullet repayment scheme on the day one is decided that you will not pay any interest, then you pay at the end of the repayment and interest together. If somebody is paying quarterly interest or monthly interest will not qualify in the bullet repayment nomenclature. Now there are various lenders also follow the process that the customer has option to switch that initially they take the bulletin but they end up paying monthly or quarterly age in main.
So and they are allowed to switch from one scheme to other by paying nominal charges of 500 rupees or something like that. Depending on what are the design of that scheme is. So to pinpoint who is doing what and what is that Everybody’s percentage is difficult to say at the moment. But I think when common regulation comes, this is not something affect one player or other and everybody will adjust. And ultimately golden market if you see but growth is coming from informal segment to formal segment. Gold loan segment you are talking about. If you look at new players are coming.
Old players are continuing to grow 20, 25% and new players also growing thereby. It means there is a clear cut market opportunity gap exists. It is not that four new players have come in and the new player, the old player market share have gone down or absolute aum have gone down. Some of the largest player players are growing at the pace of 18, 20% year after year.
Shreepal Doshi
Our financial is not so solid. Right. Like a system level. Also like I’ll take that question separately. But this one question here was that so now incrementally we have to classify a, classify a loan from day zero itself that it will be bullet repayment or it will be monthly repayment and then accordingly accordingly decide the ltv. However, that switching option which industry currently had like you know, typically at the time of disbursement you give him a monthly repayment option and then the customer moves to a bullet repayment and then you know, the interest rate changes.
Typically at the time of disbursement if it is 11% per per annum it gets shifted to probably 20% if you know he’s, he’s going for bullet repayment as an option. So now you believe now this, now the incremental policy will be that on day zero you have to decide monthly or bullet recipient. And if he is going for monthly and then trying to switch to bullet, bullet, he cannot do that. Is it
Rajesh Sharma
so he can do that provided he adjusts to the new norms of LTV even when they are declared.
Shreepal Doshi
Okay,
Rajesh Sharma
so suppose, put your Christian state, suppose a one lakh rupees of loan. If in, if it’s given at the 14% rate of interest for six months then 7% is the interest. LTV will get adjusted. So instead of 75%, 75,000 rupees on loan, you are supposed to be only 68,000 rupees of loan to him. So only that much adjustment has to be done.
Shreepal Doshi
Right? Right. Got it. So that was principal repayment that the customer will have to do if you want It.
Rajesh Sharma
Yes.
Shreepal Doshi
Got it. So this is very helpful. Thank you for answering my questions in detail. Thank you.
operator
Thank you. The next question is from the line of Pavin Pandey from Athena Investments. Please go ahead.
Bhavin Pande
Hi, good afternoon. Thanks for the opportunity. I hope I’m audible.
operator
So I request you to please use your handset.
Bhavin Pande
Oh yeah. Am I audible now?
operator
Yes sir.
Bhavin Pande
Yeah. Thank you for the opportunity. So if we look at slide 17, non interest income has moved up significantly sequentially almost 2x of last quarter. So. So what are the components that have contributed to this kind of a bump up? And also what was the share of the insurance distribution business in this
Rajesh Sharma
Hardik. You take this question.
Hardik Doshi
Yeah. So in the fourth quarter you see the bump up in the non. In the other, other non interest income. There is a component of insurance income also in that. I will give you the exact number, how much it. Yeah. So around 34 crores of. Out of those 101 or 102 crores that you see, 34 crores is coming from the insurance. And as you would have known that we started doing insurance selling from fourth quarter of last financial year. And you know, since then the insurance income has been kind of on a strong upward trajectory for the full year. We have a net fee from the insurance of around 73 crores.
Bhavin Pande
Okay. And other sources that also contributed apart from insurance. If you could expand on those. Yeah.
Hardik Doshi
So in total our known interest income is comprising of three components. One is car loan net car loan origination fee. That was around 24, 24 crores for the fourth quarter FY25. The other component is CO lending income which was around 55 crores. And the CO lending income is proportionate to the growth rate. So the higher the disbursement, higher the loan book growth and also the percentage of AUM that is under the CO lending. So if you see from third quarter FY25 to fourth quarter FY25, our percentage of CO lending AUM has remained. So this increase that you see from 29 crores to 55 crores is largely coming from the higher disbursal and the growth in the loan book.
And the third component within the non interest income is the insurance fee income which as I mentioned is 34 crores for the fourth quarter FY25 and 73 crores for the full year. And apart from that there are other components like treasury income which is more like an investment income.
Bhavin Pande
Okay, that was really helpful. And so when we look at micro lab and solar rooftop kind of businesses, how have they performed specifically in this quarter? Also we have seen some sort of subdued performance in the MSME portfolio as compared to other segments. So what would be the strategy around these two segments and overall MSME book from a strategic vantage point going forward.
Rajesh Sharma
So our focus was on MSME that we have grown and micro love have been added. Since we are more focusing on the gold loan and we wanted to contain our growth within 50% range as a matter of board direction. So we have diverted all our credit line towards the high yield product which is the gold loan. However, this year we are going to add more branches in microwave and msme. This year we intend to grow that segment again the normal growth about 15 to 20% kind of a growth in that MSME segment. And that segment will yield a good amount of profit because that we understand very well.
We are doing that segment since last year, almost 13 years. So this year you will see a lot of branch additions happening in that and growth will be back.
Bhavin Pande
Okay, that was really helpful and good luck.
operator
Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of who is an individual investor? Please go ahead.
Unidentified Participant
Hi. Congratulations for the good numbers. I just wanted to ask what will be the outlook for FY26 regarding growth.
Rajesh Sharma
So you are. You wanted to know overall outlook or the only gold?
Unidentified Participant
Growth outlook? Growth outlook.
Rajesh Sharma
Okay, so growth outlook we will be in the. We will continue to grow our book in all segments and I think what we are aiming in earlier also we told in next three years we are going to be growth in the range of 27 to 30% kind of range. And we intend to reach a 50,000 crore of EU book by FY28. And we already have invested in technology and collection and now building the branch network and our tech center is already built all the technology and keeping the paces ahead of others. So I think 50,000 core reaching by FY28 should be feasible.
We are working on that.
Unidentified Participant
Okay, thank you.
Rajesh Sharma
About our ROE while we will remain in the growth phase but 1.5 to 2% ROE we intend to generate from pure fee income play. And about overall ROE we should be in the range of about 16%. Despite this new branches opex will get absorbed. So on a steady state our ROE could have been higher. But yes, since we wanted to grow couple of 200 basis kind of impact of that will come. So but we’ll maintain the steady state ROE in the range of 16% in next three years.
operator
Thank you ladies and gentlemen. You may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of ARUP who is an individual investor. Please go ahead.
Unidentified Participant
What kind of leverage ratio are you comfortable with and do you have any QIP plan in mind for the next one year?
Rajesh Sharma
Happy to take this question.
Hardik Doshi
Yeah, sure. So I think in terms of the leverage currently we are around 3 and a half x on a debt to equity basis. We will not go above forex kind of a leverage and that is something that we have maintained historically. Also in terms of the fundraising plan, we have taken the board resolution as you would all of you guys know, for the 2000 crores. And the timing of the fundraising would be based on the market conditions. So we continue to evaluate that. But I think the exact timing would depend on the market conditions and how things play out from here onwards.
Unidentified Participant
Okay, thank you.
operator
Thank you, ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for closing comments.
Rajesh Sharma
Yeah. Thank you. As we move into FY26, we believe our core strategy focused on secure granular retail lending positions us well to capture sustained demand across msme. Affordable housing, Microlab Gold loan and construction finance. Each of these segments offer large underpenetrated opportunities in our distribution footprint. Combined with the disciplined underwriting and deep product expertise gives us a clear advantage. We will continue to invest in technology analytics not only to improve turnaround times and risk assessment, but also to drive better productivity and customer experience across the board. With a fully secured book, improving operating metrics and healthy asset quality, we feel confident in managing credit costs even as we scale.
On the liability side, we are seeing strong engagement from lenders and remain well positioned to secure, diversified and cost effective funding as we grow. As the Indian economy continues to grow strongly and the market for retail lending continue to expand further, we are confident of capturing the huge opportunity available to us to grow strongly at 27 to 30% CAGR and deliver sustainable ROE of 16% plus by FY28. Thank you once again for your continued support and we look forward to continuing to engage in the quarters ahead.
operator
Thank you on behalf of Goindia Advisors. That concludes this conference. Thank you for joining us and you may now disconnect your lines.