USHAFIN - Usha Financial

📊 NSE: USHAFIN 🏢 Finance & Investments 📅 Last Updated: 12/14/2025 14:48

💰 Financial Performance

Revenue Growth by Segment

Institutional lending remains the primary driver, contributing INR 40.35 Cr in interest income and INR 3.55 Cr in processing fees from a disbursement of INR 435.90 Cr in FY25. Retail lending contributed to the remaining disbursement of INR 37.62 Cr. Total revenue from operations saw a decline of 5.68% from INR 63.22 Cr in FY24 to INR 59.63 Cr in FY25.

Profitability Margins

Net profit ratio improved by 14.40% YoY, rising from 20.23% in FY24 to 23.14% in FY25, primarily driven by a reduction in total expenses from INR 46.92 Cr to INR 42.45 Cr. Return on Net Worth (RoNW) decreased by 35.78% from 13.55% to 8.70% due to the significant equity infusion from the IPO.

EBITDA Margin

Profit After Tax (PAT) grew by 7.91% from INR 12.79 Cr in FY24 to INR 13.80 Cr in FY25. Net Interest Margin (NIM) compressed from 8.68% in FY24 to 8.28% in FY25, a decrease of 40 basis points.

Credit Rating & Borrowing

The long-term rating was downgraded in December 2025 from IVR BBB/Stable to IVR BBB-/Stable. Finance costs decreased by 19.02% from INR 29.78 Cr in FY24 to INR 24.11 Cr in FY25, while the Interest Coverage Ratio improved from 1.58x to 1.78x.

⚙️ Operational Drivers

Raw Materials

Not applicable as USHAFIN is a financial services company; its primary 'raw material' is capital for lending.

Import Sources

Not applicable.

Key Suppliers

Not applicable.

Capacity Expansion

Total Loan Assets (AUM) grew from INR 306.96 Cr in FY24 to INR 410.70 Cr in FY25. However, AUM marginally declined to INR 394.58 Cr by 1HFY26 as the company tightened underwriting policies due to stress in the NBFC segment.

Raw Material Costs

Not applicable.

Manufacturing Efficiency

Capacity utilization is reflected in loan disbursements, which totaled INR 473.52 Cr in FY25. Management reports that higher capacity utilization and operational efficiencies are driving improved financial outcomes.

Logistics & Distribution

Not applicable.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company is shifting from a wholesale-heavy model (86.50% of AUM in 1HFY26) toward unsecured MSME and Fintech co-lending segments. It aims to leverage government-backed credit guarantee programs and expand its presence in Green/EV financing through collaborative partnership models.

Products & Services

MSME loans, SME loans, NBFC/Corporate loans, Personal unsecured loans, and Electric Vehicle (EV) financing.

Brand Portfolio

Usha Financial Services Limited (UFSL).

New Products/Services

Expansion into the E-Vehicle segment and Fintech-driven unsecured personal loans via co-lending platforms.

Market Expansion

Targeting underserved niche markets with limited access to traditional banking to ensure attractive yields.

Strategic Alliances

Partnerships with Fintech platforms for co-lending and collaborative models for green financing expansion.

🌍 External Factors

Industry Trends

The industry is moving toward a Scale-Based Regulatory (SBR) framework, increasing compliance and IT investment requirements. There is a rising trend in digital lending and green finance adoption.

Competitive Landscape

Faces intense competition from large NBFCs, Fintechs, and traditional banks in the MSME and retail lending segments, which exerts pressure on Net Interest Margins.

Competitive Moat

Moat is built on niche market focus and experienced promoters (Rajesh Gupta and Anoop Garg). Sustainability depends on the ability to manage asset quality while diversifying away from wholesale concentration.

Macro Economic Sensitivity

Sensitive to inflation and economic slowdowns which impact borrower repayment capacity; sector-wide GNPA for NBFCs averaged 5-6% in FY25.

Consumer Behavior

Shift toward digital credit processes and increasing demand for EV financing and unsecured personal loans.

Geopolitical Risks

Global disruptions and macroeconomic uncertainties are monitored as they can affect credit demand and asset quality.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI Scale-Based Regulatory (SBR) Framework, which mandates enhanced governance, IT investments, and detailed reporting. Compliance with Section 45IC of the RBI Act requires a statutory reserve (INR 2.76 Cr transferred in FY25).

Environmental Compliance

Not disclosed in absolute INR, but the company is increasing focus on ESG and Green Finance as a strategic imperative.

Taxation Policy Impact

Effective tax expense was INR 4.37 Cr in FY25 on a Profit Before Tax of INR 18.17 Cr (approx. 24%).

⚠️ Risk Analysis

Key Uncertainties

Asset quality remains the primary uncertainty; slippages increased to INR 19.19 Cr in 1HFY26 from INR 14.16 Cr in FY25. Unseasoned portfolios in the new Fintech and unsecured MSME segments present monitorable risks.