Capital Trust Limited — Credit Ratings, 26-12-2024: Credit Rating

**Capital Trust Limited - Financial and Credit Rating Summary**

Capital Trust Limited reported a total operating income of ₹60.01 crore for FY2024, a decrease from ₹62.92 crore in FY2023. The net profit bounced back to ₹2.15 crore after three years of losses, reflecting a significant improvement in operational efficiency. Earnings Per Share (EPS) stands at ₹0.24. This turnaround is attributed to lower total expenses and reduced pre-provision operating losses, enhancing the company's profitability profile.

The company’s operational costs decreased by approximately 51% year-on-year due to improved cost management, including ongoing efforts to reduce borrowings. This resulted in an interest coverage ratio of 1.28 times, up from -1.84 times the previous year, indicating better capacity to meet interest obligations.

Capital Trust's asset quality remains moderate, with a gross non-performing assets (GNPA) ratio recorded at 1.61% as of September 30, 2024. While the company reported an improvement from previous years, increasing delinquencies in the microfinance sector pose a risk, necessitating continuous monitoring of asset quality.

The balance sheet shows a tangible net worth of ₹37 crore, a recovery from losses owing to recent capital infusion and rights issuance planned for ₹50 crore, which is expected to strengthen the capital structure. The company’s total assets are reported at ₹168.71 crore.

The ratings agency CARE Ratings has reaffirmed the company’s rating at BB+ with a stable outlook. This reflects the ongoing recovery in profitability, though challenges such as concentrated borrowing and market stress persist. The focus moving forward should be on maintaining asset quality while capturing growth opportunities in a diversified portfolio.

**Investor Insight:** Consider holding positions in Capital Trust Limited given its improving financial metrics, but be cautious of sector challenges that could impact future performance.