UGROCAP - Ugro Capital

📊 NSE: UGROCAP 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 14:39

💰 Financial Performance

Revenue Growth by Segment

Assets Under Management (AUM) grew 33% YoY to INR 12,003 Cr in FY25 and reached INR 12,226 Cr by Q2 FY26 (up 20% YoY). The MyShubhLife platform segment reached an AUM of INR 1,270 Cr within 4 quarters.

Geographic Revenue Split

Operations span 12 states with 200+ branches. Emerging Market branches (Tier 3 and beyond) contribute INR 2,073 Cr to AUM, representing approximately 17% of the total portfolio.

Profitability Margins

Profit After Tax (PAT) grew 21% YoY to INR 144 Cr in FY25 from INR 119 Cr in FY24. Return on Managed Assets (ROMA) stood at 1.2% for FY25 and moderated to 1.0% (annualized) in Q1 FY26.

EBITDA Margin

Pre-provisioning operating profit to average managed assets (PPOP/AMA) stood at 3.1% in FY25, declining from 3.4% in FY24 due to higher operating expenses and cost of funds.

Capital Expenditure

Not explicitly disclosed in INR Cr, but the company is funding a 100% acquisition of Profectus Capital via a rights issue of INR 381 Cr and CCD issuance of INR 911 Cr.

Credit Rating & Borrowing

Long-term bank loan facilities and NCDs are rated IND A+/Stable and CRISIL A/Stable. Blended liability interest cost stood at 10.6% as of March 2025.

⚙️ Operational Drivers

Raw Materials

Debt Capital (INR 6,904 Cr) and Equity Capital (INR 2,426 Cr) serve as the primary 'raw materials' for lending operations.

Import Sources

Not applicable for financial services; funding is sourced from 59 domestic and international lenders.

Key Suppliers

Public Sector Banks contribute 28% of total funding as of March 31, 2025. Other sources include development financial institutions and ECBs.

Capacity Expansion

Current network of 200+ branches is planned to expand to 400 branches by March 2026, representing a 100% increase in physical capacity.

Raw Material Costs

Cost of funds (interest expense) is 10.6% of outstanding debt. The company aims to consolidate its 59-lender base to increase ticket sizes and lower borrowing costs.

Manufacturing Efficiency

Collection efficiency improved to 100% in Q2 FY26 from 96% in the previous year; 93% of assets are maintained in Stage 1.

Logistics & Distribution

Operating expenses to average managed assets stood at 3.6% in FY25, expected to remain elevated due to branch expansion plans.

📈 Strategic Growth

Expected Growth Rate

25-30%

Growth Strategy

Growth will be achieved through the 100% acquisition of Profectus Capital (adding INR 3,468 Cr AUM), scaling the MyShubhLife digital platform (INR 200 Cr monthly disbursement), and doubling the branch network to 400 locations.

Products & Services

Secured Loans Against Property (LAP), Unsecured Business Loans, Machinery Finance, Supply Chain Finance, and School Financing.

Brand Portfolio

UGRO Capital, MyShubhLife, Profectus Capital.

New Products/Services

School financing is identified as a new INR 2,000 Cr medium-term profit pool opportunity following the Profectus acquisition.

Market Expansion

Geographic expansion into 3-4 new states and increasing branch count to 400 by March 2026.

Strategic Alliances

Partnerships with 70+ original equipment manufacturers (OEMs) for machinery financing and 59 lenders for co-lending and liability management.

🌍 External Factors

Industry Trends

Shift toward co-lending models (43% of AUM) and digital embedded finance. The industry is addressing a $20 billion credit gap in the small retail and micro-merchant space.

Competitive Landscape

Highly competitive MSME segment with significant price sensitivity on yields and competition from banks and other NBFCs.

Competitive Moat

Moat is built on a DataTech lending platform and a diversified distribution model (200+ branches and 70+ OEM partners), which are sustainable due to high entry barriers in proprietary data-tech integration.

Macro Economic Sensitivity

Sensitive to MSME sector overleverage; company responded to macro headwinds by tightening underwriting and reducing throughput by 10 percentage points.