Key Financial Figures (Consolidated, Q1 FY27)

  • Total AUM: ₹15,013 crores
  • Net Disbursements: ₹2,551 crores (59% YoY growth)
  • Interest Income: ₹363 crores (up 19% YoY, down 13% QoQ)
  • Co-lending and Direct Assignment Income: ₹75 crores (down from ₹155 crores in Q4 FY26)
  • Other Income: ₹97 crores (largely fee/commission and net gain on fair value changes)
  • Total Income: ₹535 crores (up 27% YoY)
  • Finance Cost: ₹289 crores
  • Cost of Borrowing: 10.14% (7th consecutive quarterly improvement)
  • Total Debt: ₹10,793 crores (66% beyond 3-year tenure)
  • Operating Expenses: ₹119 crores (down 42% QoQ from ₹217 crores)
  • Credit Cost: ₹66 crores (1.7% of average AUM)
  • GNPA: 2.6% (vs 2.5% in March 2026)
  • Stage 1 Exposure: 92.5%
  • Stage 2 Exposure: 4.9%
  • Provision Coverage on Stage 3: 45%
  • Net NPA: 1.9%
  • Collection Efficiency: 98%
  • Pre-tax ROA: 2.6%
  • Reported PAT ROA: 2.8%
  • ROE: 9.2%
  • Liquidity Position: ₹1,864 crores
  • Net Worth: ₹2,976 crores
  • Leverage: 3.6x
  • Capital Adequacy (Standalone): 21%
  • Monthly Disbursement Milestone: Crossed ₹1,000 crores in July 2026

Strategic Business Update

Business Realignment: The company is shifting focus from Prime Intermediated business to two core engines:

1. Emerging Market Secured LAP: AUM of ₹3,896 crores (9% QoQ growth from ₹3,581 crores in March). Disbursed ₹592 crores in Q1. Portfolio yield ~18.5%, GNPA ~2.1%. Distribution network: 317 branches across 13 states. Blended monthly productivity increased from ₹48 lakhs/branch in FY26 to ₹62 lakhs/branch in Q1 FY27. Mature branches (>12 months) producing ~₹81 lakhs/month.

2. Embedded Merchant Finance (GROx): AUM of ₹3,003 crores (32% QoQ growth from ₹2,280 crores in March). Disbursed ₹1,853 crores in Q1 (~60,000 loans monthly). Serves ~3.4 lakh active customers. Portfolio yield ~26%, GNPA ~2.1%.

Combined Contribution: Emerging Market and Embedded Finance now represent 46% of total AUM (up from 32% in December 2025). Target is 85% of AUM by FY29.

Cost Reduction: Annualized operating cost reduction of ~₹220 crores achieved. Q1 opex run rate near FY27 guidance of ~₹490 crores.

Merger Update

  • Merger of Profectus Capital into UGRO Capital received stock exchange approvals.
  • Scheme filed with NCLT. Expected completion by Q4 FY27 (possibly by Q3 if expedited).
  • Upon effectiveness, will involve setoff of goodwill and reassessment of carrying value of future spread asset (co-lending/direct assignment portfolio).
  • This will be a non-cash accounting adjustment that reduces reported net worth but does not impact capital adequacy (already deducted for regulatory capital).
  • Expected to improve earning predictability and support stronger ROE.

Funding and Capital

  • Incremental long-term borrowing cost: ~9.8% in Q1.
  • Company confident of achieving planned growth without incremental equity through FY29.
  • On merged basis (post-Profectus merger), capital adequacy expected to be ~23-24%.
  • GROx platform now onboarding other lenders (SIDBI and other banks/NBFCs) for co-lending.

Guidance and Outlook

  • FY27 AUM expected to remain flat, but on-balance sheet assets to grow gradually.
  • Emerging Market LAP targeted to grow at 25% CAGR.
  • Embedded Merchant Finance targeted to grow at 25% CAGR.
  • Defocused Prime portfolio running down at ~25% (faster than guided 20%).
  • ROA expected to improve from current 2.1% (normalized) to 3-3.5%.
  • Credit cost guidance for EM LAP maintained at 1.5-2%.

Q&A Highlights

  • Valuation Concerns: Management addressed shareholder concerns about stock trading below book value, citing transition phase, PE investor exits, and market cap thresholds for institutional investment.
  • Dividend/Buyback: Buyback not possible due to leverage constraints; dividend policy change would require shareholder approval and RBI consent.
  • Execution Risks: Key risks include ensuring branch productivity improvement, managing credit risk in new embedded finance segments, and calibrating portfolio runoff rate.
  • Asset Quality: GNPA increase in focused portfolios attributed to normal seasoning; peak delinquencies expected at 3-3.5% for EM LAP and ~3% for Embedded Finance.