CSL Finance's Q2FY24 Triumph: A Story of Expansion and Profitability

On Tuesday, CSL Finance's shares surged to Rs 348.80 per share, reaching an intraday high of Rs 351.90 and a low of Rs 319.90.

CSL Finance Limited (CSLFL), formerly known as Consolidated Securities Limited, was established in December 1992 as a non-deposit-taking Non-Banking Financial Company (NBFC) headquartered in Delhi. The company initiated its wholesale lending operations in 2011 and expanded into SME lending in 2017, primarily focusing on lending funds to small and medium-sized businesses engaged in real estate development.

Mr. Rohit Gupta, the Managing Director and promoter of the company, boasts over 25 years of diverse experience spanning Merchant Banking, Corporate Finance, Financial Restructuring, Project Finance, Stock Markets, and Secured Lending.

As of September 2022, CSL Finance had a loan book valued at Rs 602 crore. Of this, 63 percent was attributed to Wholesale Lending, with the remaining 37 percent dedicated to SME Lending.

Half-yearly updates reveal robust performance, with the company witnessing a quarter-on-quarter (Q-o-Q) growth of 18 percent. The Assets under Management (AUM) stood at approximately Rs 882 crore as of September 2023, compared to Rs 746 crore as of June 2023.

New loans disbursed during the quarter amounted to Rs 282 crore (Rs 157 crore in Wholesale Lending and Rs 125 crore in SME Lending), reflecting an impressive Q-o-Q growth of 51 percent.

CSL Finance maintains a substantial liquidity surplus, with approximately Rs 91 crore as of Q2FY24 (inclusive of undrawn CC limits and term loans). The company successfully raised equity through a preferential issue from Foreign Institutional Investors (FII) amounting to Rs 48.62 crore.

In terms of capital adequacy, CSL Finance boasts a well-capitalized Capital Adequacy Ratio (CAR) of approximately 53 percent in Q2FY24.

Further strengthening its financial position, the company secured debt of approximately Rs 174 crore in Q2FY24 from both new and existing lenders, including prominent institutions such as SIDBI, Bandhan Bank, Poonawalla Fincorp, Orix Leasing, SBI, HDFC, and Federal Bank.

CSL Finance expanded its operational scope by introducing its first unsecured loan product - a new line of lending tailored for Fabricators, categorized under 'Suvidha loans.' This expansion was carried out in collaboration with India's leading structural steel tube manufacturer, APL Apollo Group, along with their distributors and retailers.

From a financial perspective, CSL Finance demonstrates a market capitalization of Rs 785 crore and has achieved an impressive 3-year stock price compound annual growth rate (CAGR) of 71 percent. In FY23, the company reported noteworthy net sales of Rs 117 crores and a net profit of Rs 46 crores, with a dividend payout ratio of 11 percent.

On Tuesday, CSL Finance's shares surged to Rs 348.80 per share, reaching an intraday high of Rs 351.90 and a low of Rs 319.90. As of August 2023, the company's promoters retained about 47 percent stake in the organization.

Disclaimer: The article is for informational purposes only and not investment advice.