Stock to buy under ₹100: Anand Rathi sees 18% upside in this NBFC share. Should you buy?

Mint

2 days ago

Shares of Capital India Finance Ltd (CIFL), a mid-tier non-banking financial company (NBFC), could be headed for a sharp upward move, according to a recent technical report by Anand Rathi. The brokerage has issued a bullish call on the counter, projecting an upside of 18 percent in the near term, supported by a favorable technical setup and improving momentum indicators.
CIFL is currently trading near the ₹ 40 level, having recently corrected nearly 18 percent from its recent peak in the ₹ 44–45 zone. Anand Rathi highlighted that the stock has successfully tested the 61.8 percent Fibonacci retracement level, which closely aligns with the monthly S1 floor pivot. This convergence of support zones around the ₹ 38–40 band suggests a potential base formation, presenting a strong risk-reward trade opportunity.
The brokerage has recommended accumulating the stock in the ₹ 38–40 range, with a target price of ₹ 46, implying an upside of over 18 percent from current levels. A stop-loss has been suggested at ₹ 35 on a daily closing basis, making the risk-reward ratio favourable for short-term traders.
On the fundamental side, CIFL continues to show signs of stable growth. As per the company's March 2025 data, Assets Under Management (AUM) reached ₹ 10.04 billion, a 7 percent increase from ₹ 9.35 billion in March 2024. This milestone marks a key achievement in CIFL's journey as a focused lender to India's underserved micro, small and medium enterprise (MSME) segment.
Of the total AUM, a significant 84 percent is secured lending, underscoring the company's cautious underwriting strategy. The remaining 16 percent constitutes unsecured loans. The company reported a net Non-Performing Asset (NPA) ratio of just 0.98 percent, indicating strong asset quality. Meanwhile, its Capital Adequacy Ratio stood at 36.08 percent, while the debt-to-equity ratio remained moderate at 1.06x, suggesting room for expansion without compromising financial stability.
Commenting on the company's future plans, CEO Pinank Shah noted, 'The sale of Capital India Home Loans will help sharpen our focus on MSME lending. With a sound framework now in place, we expect to see results from FY26 onwards. Our aim is to grow our branch network to 100 locations over the next two years.'
Capital India Finance has delivered strong returns over the past year, rising over 94 percent. The stock has rebounded well in recent months—gaining 11 percent in June alone, after a 21 percent rally in April. May was relatively muted with a 1 percent decline, but earlier months had seen weakness, with the stock falling 6.7 percent in March, 8.5 percent in February, and 3 percent in January.
At current levels, CIFL remains well below the ₹ 100 mark, making it a notable pick in the under- ₹ 100 segment. For retail investors looking for NBFC exposure in a smallcap format, the combination of improving technical indicators and stable business performance may offer an attractive entry point.