Financial Performance Overview

UGRO Capital reported its strongest lending quarter in history with disbursements exceeding INR 1,000 crore in each month of Q2 FY27:

  • July: INR 1,057 crore
  • August: INR 1,010 crore
  • September: INR 1,092 crore

Quarterly Performance (Q2 FY27):

  • Total disbursement: INR 3,159 crore, up 77% year-on-year and 24% quarter-on-quarter
  • Profit After Tax: INR 50.7 crore, up 17% year-on-year
  • Profit Before Tax: INR 68.3 crore, up 12% year-on-year
  • Total Income: INR 578.4 crore, up 8% quarter-on-quarter
  • Finance Cost: INR 296.0 crore, up 2% quarter-on-quarter
  • Operating Expenses: INR 127.2 crore, down 38% from two quarters prior (INR 205 crore)
  • Credit Cost: INR 86.9 crore, up 32% quarter-on-quarter
  • Tax: INR 17.5 crore

Half-Yearly Performance (H1 FY27):

  • Total disbursement: INR 5,710 crore, up 69% year-on-year
  • Profit After Tax: INR 118.6 crore, up 53% year-on-year
  • Total Income: INR 1,113.0 crore, up 26% year-on-year
  • Finance Cost: INR 584.9 crore, up 38% year-on-year
  • Operating Expenses: INR 245.8 crore, down 5% year-on-year
  • Credit Cost: INR 152.5 crore, up 66% year-on-year
  • PBT: INR 129.8 crore, up 19% year-on-year
  • Tax: INR 11.2 crore, down 65% year-on-year

Asset Quality and Portfolio Metrics

  • AUM: INR 15,019 crore, up 23% year-on-year (virtually unchanged quarter-on-quarter at 0%)
  • Portfolio Yield: 18.7%, up 108 basis points
  • GNPA: 2.7% (1.7% in the two growth businesses)
  • Collection Efficiency: 97%
  • Capital Adequacy: 18.8% currently, expected to reach approximately 22% after merger completion

Business Segment Performance

Emerging Market LAP:

  • Small-ticket loans against property to MSMEs in smaller towns through UGRO's own branches
  • AUM: INR 4,268 crore, up 42% year-on-year
  • Branch network: 317 branches across 13 states
  • Average monthly disbursement per branch: INR 0.73 crore (up from INR 0.48 crore in FY26)
  • Mature branches (older than one year): INR 0.86 crore average monthly disbursement

GROx Embedded Lending Platform:

  • AUM: INR 3,661 crore, nearly tripled in a year
  • Serves approximately 4.1 lakh merchants through partners in payment ecosystem and marketplaces
  • Monthly disbursement: approximately INR 750 crore
  • Repayment rate: 95% on daily collection basis

Strategic Reset Progress

The company implemented a strategic reset in February 2026 with four key decisions:

1. Exit lower-yielding lending: Stopped sourcing prime loans through intermediaries

2. Focus on two growth engines: Emerging Market LAP and GROx embedded merchant lending

3. Reset cost base: Targeted INR 220 crore annual cost reduction

4. Fund growth from within: No further equity raise, targeting return on assets of 3.0-3.5% by FY29

Nine-month progress:

  • Two growth engines increased from 32% to 53% of loan book
  • Lower-yielding book shrunk by approximately one third
  • Operating cost reduced by 38%
  • Portfolio yield increased

Merger Update

  • Shareholders and creditors approved merger of Profectus Capital into UGRO on 23 September 2026
  • NCLT final hearing scheduled for 20 November 2026
  • Post-merger impact: Income on Co-lending and Direct Assignment loans will be recognized over actual loan period rather than full contractual term, reducing impact of reversals
  • Expected to make reported profits steadier and more predictable

Management Commentary

Mr. Shachindra Nath, Founder and Managing Director, stated: "UGRO was founded on a simple belief: that India's small businesses deserve credit built on data, not collateral alone. This quarter, that belief reached a new scale. We now serve over four lakh small businesses, and our platform is turning decisively towards Bharat, through 317 branches in smaller towns and through the payment apps that India's merchants use every day. Nine months ago, we chose a harder path and rebuilt the business around where we have a real edge. This quarter's results show that the new model is working."

Company Background

UGRO Capital is India's MSME DataTech lending platform, listed in July 2018 as India's first listed NBFC startup. The Company addresses the ₹30 lakh crore MSME credit gap through 317 Emerging Market branches across 13 states, the GROx embedded merchant finance platform and GRO Score 3.0 AI/ML underwriting.

#Tags: #UGROCapital #NBFC #MSMELending #DisbursementGrowth #StrategicReset