­Comfortable capitalisation with a diversified funding mix
CSL’s net worth improved owing to internal accruals to Rs. 541.65 crore as of March 31, 2025 from Rs 474.83 crore as of March 31, 2024. It reported an adequate capital adequacy ratio (CAR) of 46.95 percent, comprising Tier 1 capital at 45.90 percent as on March 31, 2025. The gearing remains comfortable at 1.29 times as on March 31, 2025 as compared to 1.06 times as on March 31, 2024. The company has a diverse lender profile, comprising banks, both private and public and financial institution, CSL has been able to obtain disbursements of Rs 505.41 Cr. for FY2025 in the form of term loans. CSL’s average cost of funds ranges between 11 to 12 percent.
Acuité believes, going forward, that the ability of the company to mobilise low-cost funding through debt and its ability to deploy the funds profitably will be key factors to monitor.

Healthy profitability metrics
The profitability saw an improvement YoY as marked by increase in Total Income (net of interest expense) from Rs. 121.26 Cr. in FY24 to Rs. 146.90 Cr. in FY25. The PAT for FY25 stood at Rs. 72.09 Cr. as compared to Rs. 63.36 Cr. during FY24. The PPoP has marked an increase from Rs. 88.41 Cr. during FY24 to Rs. 104.88 Cr. during FY25. CSL has also shown strong control over its credit costs as the asset quality has shown negligent deterioration with lower slippages and increased recoveries.
Acuité believes, going forward, the company will be able to maintain healthy profitability metrics given that it’s asset quality and credit costs are contained.

Healthy asset quality
The company’s asset quality is marked by an on-time portfolio of 95.71 percent as on March 31, 2025. CSL’s asset quality has remained at similar levels from 0.44 percent GNPA and 0.26 percent NNPA as on March 31, 2024 to 0.46 percent GNPA and 0.34 percent NNPA as on March 31, 2025 with PCR of 25 percent. The prudent underwriting policies adopted by the management and improving collection efficiency has enabled the company to improve its asset quality.  
Acuité believes that going forward the ability of the company to maintain comfortable asset quality and growth momentum in AUM will be key rating sensitivity.

Low seasoning of SME portfolio and Concentration risk
CSL forayed into the lending segment in 2011, but has commenced extending loans to SME since 2017, with an average tenure from 5 to 7 years. The company’s retail loan book has grown significantly in the last 4 years, however restricted to Rs. 411.78 Cr. as of March 31, 2025 compared to Rs. 440.93 Cr. as of March 31, 2024; constituting ~35 percent of the total AUM as on March 31, 2025. As the tenure is high the seasoning of this segment is yet to be established. CSL’s portfolio is majorly exposed towards its real estate segment, with 65% as on March 31, 2025, though, it has come down gradually from 81% as on March 31, 2021. Further, company is expecting to achieve the product mix of 55:45 between retail and wholesale segment in the next 12 to 18 months. CSL’s book is concentrated to its top 20 borrowers account which form ~41% of total AUM and slippages from these large accounts can put pressure on the asset quality, leading to higher delinquencies. Further, the company’s operations are concentrated in Delhi-NCR region.