Capital Trust Limited Stock Analysis

Successful completion of rights issue raising ₹2,381 lakhs at ₹14 per share in November 2025, with funds fully utilized as certified by the monitoring agency, providing immediate liquidity infusion / Total income for nine months at ₹3,275.58 lakhs, though down from prior year, still demonstrates revenue generation capability across interest income (₹1,886.91 lakhs) and fee income (₹570.59 lakhs) / Significant reversal in impairment provisions with a credit of ₹240.62 lakhs in Q3 FY26 versus ₹1,605.62 lakhs charge in Q2 FY26, indicating potential stabilization in asset quality recognition / Deferred tax asset creation of ₹860.81 lakhs for the nine-month period provides future tax shield benefit against accumulated losses

Core business profitability collapsed with nine-month loss of ₹2,863.80 lakhs (EPS of -₹14.38) versus ₹102.50 lakhs profit in prior year, indicating fundamental revenue model breakdown / Management explicitly disclosed a halt to disbursements due to collection challenges in unsecured lending and small loan sectors, directly impacting AUM growth and future income generation capacity / Impairment charges totaling ₹1,513.41 lakhs for nine months (versus ₹92.32 lakhs prior year) signal severe deterioration in loan portfolio quality and credit underwriting effectiveness / Finance costs remained elevated at ₹1,010.27 lakhs for nine months despite lower business activity, creating negative carry and unsustainable cost structure / Interest income declined 31% YoY for the quarter (₹508.91 lakhs vs ₹736.33 lakhs), reflecting shrinking loan book and reduced business velocity / Exceptional charge of ₹91.47 lakhs due to new labour code gratuity impact adds non-recurring pressure, with potential for further regulatory compliance costs

Q3 FY26 loss narrowed materially versus Q2 FY26, with PAT improving from Rs -1,788.35 lakh to Rs -243.11 lakh and PBT from Rs -2,308.70 lakh to Rs -234.45 lakh. / Total income recovered sequentially to Rs 1,129.61 lakh in Q3 from Rs 882.40 lakh in Q2, indicating some near-term stabilization in operations. / Finance costs reduced to Rs 252.36 lakh in Q3 from Rs 348.02 lakh in Q2, supporting near-term margin relief. / Rights issue of 1,70,09,702 shares raised Rs 2,381 lakh at Rs 14/share, and the company disclosed full utilization of proceeds as per stated objects with monitoring agency certification. / Statutory auditors issued an unmodified limited review opinion on the standalone unaudited Q3 results, reducing accounting-quality concerns from a reporting perspective.

Core revenue has contracted sharply YoY: Q3 total income fell to Rs 1,129.61 lakh from Rs 2,519.82 lakh, with interest income down to Rs 508.91 lakh from Rs 1,698.67 lakh and fee income down to Rs 106.39 lakh from Rs 514.15 lakh. / Profitability remains weak with Q3 PAT at Rs -243.11 lakh and 9M PAT at Rs -2,863.80 lakh versus a positive Rs 102.50 lakh in 9M FY25. / Earnings quality is low because results were heavily influenced by volatile line items, including a Rs -240.62 lakh impairment reversal in Q3 and large impairment charge in Q2 (Rs 1,605.62 lakh). / Management explicitly stated a cautious disbursement stance due to collection challenges in unsecured/small loans, which has already led to lower disbursements, reduced AUM, and weaker income metrics. / Cost structure remains heavy relative to income: Q3 employee benefit expense was Rs 729.85 lakh and other expenses Rs 486.50 lakh against total income of Rs 1,129.61 lakh, limiting operating leverage.