Capital First Limited

Capital first Limited is a NBFC which is growing pretty fast. Capital First started as a Wholesale lending business but later it transformed to a retail lending business. out of 100%, the share of retail lending is 85.79% and whole sale is 14.21%.

The company has rating of AA+ by the credit rating companies. The company is also maintaining capital adequacy ratio of 20.07% which is higher than the 15% which is to be maintained as per RBI.

The company has shown a humongous growth in its customer base, locations covered, total assets under management. It has managed to increase its customer base by 130x from 2010 to 2015. It has also increased locations and grown its AUM by15x from 2010 to 2015.

The good thing about Capital First is maintenance of NPA-Non performing Assets. The company gross NPA stood at 0.86% and net NPA is at 0.48%. when compared to top 10 banks average NPA in India, the gross NPA is 3.65% and Net NPA is 1.93%. And when compared to top 10 NBFC in India the average gross NPA is 3.48% and net NPA is 1.49%. so, one can observe how well they are managing NPA's.

Looking at the profit and loss account, we can observe that the company has done very well in increasing their income and at the same time maintaining their operating expense constant. this has resulted in increase in PAT.

From technical analysis prospective, The stock is trading in BR3 mode and from past week it is trading side ways. For it to enter bull mode it has to cross 395 level.

So, one can enter the stock at levels of 395-400 and look to book a profit of 30-40 rupees per share because the next resistance is seen at levels of 445-450.

I recommend a BUY on the stock at 395 with a stop loss at 380 with the target of 440.