Key Financial Performance (Consolidated)

  • Assets Under Management (AUM): ₹15,019 crore, showing 23% year-on-year (YoY) growth
  • Net Disbursement: ₹3,159 crore, up 77% YoY and 24% quarter-on-quarter (QoQ)
  • Total Income: ₹578.4 crore, up 25% YoY and 8% QoQ
  • Interest Income: ₹385.5 crore (20% YoY)
  • Income on Co-lending/Direct Assignment: ₹109.1 crore (8% YoY)
  • Other Income: ₹83.8 crore (119% YoY)
  • Finance Cost: ₹296.0 crore, up 35% YoY
  • Net Total Income: ₹282.4 crore, up 16% YoY and 15% QoQ
  • Operating Expenses: ₹127.2 crore, down 7% YoY (reduced by more than a third from two quarters ago)
  • Credit Cost: ₹86.9 crore, up 96% YoY
  • Profit Before Tax: ₹68.3 crore, up 12% YoY and 11% QoQ
  • Profit After Tax: ₹50.7 crore, up 17% YoY
  • Portfolio Yield: 18.7%, increased by 108 basis points YoY
  • Gross NPA (AUM): 2.7%
  • Reported CRAR: 18.8%; Pro forma merged CRAR ~22%

Strategic Portfolio Shift

UGRO Capital has successfully executed its February 2026 strategy to focus on two core businesses:

  • Emerging Market LAP (Property Loans): ₹4,268 crore AUM (28% of total)
  • GROx (Embedded Merchant Finance): ₹3,661 crore AUM (25% of total)
  • Combined Focused Products AUM: ₹7,929 crore (53% of total), up from 32% in December 2025
  • De-focused Book: ₹7,090 crore (47% of total), running down at 13% QoQ pace

Merger Update - Profectus Integration

  • Shareholders and creditors approved the merger of Profectus on 23 September 2026
  • NCLT final hearing scheduled for 20 November 2026
  • The merger resets the balance sheet through reserves adjustment (no charge to profit)
  • Pro forma net worth: ~₹2,454 crore (~₹158 per share)
  • Tangible net worth: ~₹2,360 crore (~₹152 per share)
  • Changes income recognition from contractual to behavioral tenure, reducing volatility

Operational Highlights

Emerging Market LAP Business:

  • 317 branches across 13 states with 1,800+ sales executives and 500+ field collection officers
  • Average branch productivity: ₹0.73 crore per month (mature branches: ₹0.86 crore)
  • Typical loan: ₹17-19 lakh, secured on property with LTV up to 75%
  • Portfolio yield: ~18.4%, Credit cost: 1.5%-2%, GNPA: 2.0%

GROx Embedded Finance:

  • Monthly disbursement: ~₹750 crore (~83,000 loans)
  • Active merchants: ~4.1 lakh with repayment history on 7+ lakh loans
  • Live with 10 partners including PhonePe, Paytm, BharatPe, Spice Money, Meesho
  • Typical loan: ~₹0.9 lakh, unsecured with partner first-loss cover
  • Portfolio yield: ~26%, Credit cost: 3.5%-4%, GNPA: 1.4%
  • ~95% repayments collected daily at source

Financial Targets and Guidance

  • H1 FY27 Pro Forma ROA: 2.7%
  • FY29 ROA Objective: 3.0-3.5% (steady state)
  • H1 FY27 Pro Forma ROE: 10.6%
  • FY29 ROE Implied Range: 12-14% (at current leverage)
  • FY27 Operating Expense Guidance: ₹490+ crore
  • Self-funding Commitment: No equity dilution through FY29
  • Portfolio Mix Target: 85% focused products by FY29

Capital Structure and Valuation

  • Pro forma capital adequacy: ~22% on merged basis
  • Net worth: ₹3,029 crore
  • Leverage: 3.6x
  • October 2026 market value: ~₹1,138 crore
  • Price to reported book: ~0.4x
  • Price to adjusted book: ~0.5x

Additional Information

  • The company maintains a website at www.ugrocapital.com for investor information
  • The letter contains forward-looking statements that are not guarantees of future performance
  • Financial figures are consolidated and may not add due to rounding
  • Q2 FY26 figures presented on standalone basis for comparison