Nature of the Event

UGRO Capital Limited held its Q2 FY27 earnings conference call on 6th November 2026 to discuss unaudited financial results (standalone and consolidated) for the quarter and half year ended 30th September 2026. The transcript was filed with stock exchanges pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015.

Key Quantitative Figures

Financial Performance (Q2 FY27):

  • Profit Before Tax: ₹68.3 crore (up 12% YoY, up 11% QoQ)
  • Profit After Tax: ₹50.7 crore (up 17% YoY)
  • Half Year PAT: ₹118.6 crore (up 53% YoY)
  • Interest Income: ₹385.5 crore (up 20% YoY, up 6% QoQ)
  • Net Income from Co-lending/Direct Assignment: ₹109.1 crore
  • Other Income: ₹83.8 crore
  • Total Income: ₹578.4 crore (up 25% YoY, up 8% QoQ)
  • Finance Cost: ₹296 crore
  • Operating Expenses: ₹127.2 crore (down 7% YoY)
  • Employee Costs: ₹43.6 crore (down 35% YoY)
  • Pre-provision Operating Profit: ₹155.1 crore (up 22% QoQ, up 47% YoY)
  • Credit Cost: ₹86.9 crore (3.6% of average on-book loans)

Operational Metrics:

  • Total AUM: ₹15,019 crore (up 23% YoY)
  • Net Disbursements: ₹3,159 crore (up 77% YoY, up 24% QoQ)
  • Monthly Disbursements: ₹1,057 crore (July), ₹1,010 crore (August), ₹1,092 crore (September)
  • Portfolio Yield: 18.7% (up 108 bps YoY, up 53 bps QoQ)
  • Gross NPA: 2.7%
  • Net NPA: 2.0%
  • Collection Efficiency: 97%
  • Provision Coverage: 45%
  • Cost of Borrowing: 10.19%
  • Total Debt: ₹10,973 crore
  • Liquidity: ₹1,500 crore
  • Capital Adequacy (Standalone): 18.8%

Business Segment Performance:

Emerging Market LAP:

  • AUM: ₹4,268 crore (up 10% QoQ, up 42% YoY)
  • Quarterly Disbursement: ₹692 crore
  • Average Ticket Size: ₹17-19 lakh
  • Portfolio Yield: ~18.4%
  • Gross NPA: 2.0%
  • Branches: 317 across 13 states
  • Monthly Disbursement per Branch: ₹73 lakh (mature branches: ₹86 lakh)

GROx (Embedded Merchant Finance):

  • AUM: ₹3,661 crore (up 22% QoQ from ₹1,270 crore 12 months ago)
  • Quarterly Disbursement: ₹2,253 crore
  • Monthly Disbursement: ~₹750 crore (~83,000 loans)
  • Average Ticket Size: ~₹1 lakh
  • Tenure: ~13 months
  • Portfolio Yield: ~26%
  • Gross NPA: 1.4%
  • Active Merchants: 4.1 lakh (from 1.5 lakh a year ago)
  • Partners: PhonePe, Paytm, BharatPay, and others

Defocused Book:

  • AUM: ₹7,090 crore (47% of total AUM, down from 68% nine months ago)
  • Gross NPA: 3.9%
  • Running down at 15-20% annually (13% in Q2 alone, 32% over 9 months)

Dates of Action

  • Earnings Call Date: 6th November 2026
  • Quarter End: 30th September 2026
  • Profectus Merger Shareholder/Creditor Approval: 22nd September 2026
  • NCLT Final Hearing for Merger: 20th November 2026
  • Transcript Filing Date: 13th November 2026

Parties Involved

Management Participants:

  • Mr. Shachindra Nath - Founder & Managing Director
  • Mr. Anuj Pandey - Chief Executive Officer
  • Ms. Shilpa Bhatter - Chief Financial Officer
  • Mr. Siddharth Rajan - Head of Strategy & Investor Relations

Moderator:

  • Ms. Juhi Manwani - Arihant Capital Markets Limited

Question Participants:

  • Shailendra Soodh (Individual Investor)
  • Parth (Zen Wealth Management)
  • Rajendra Jain Modi (Individual Investor)
  • Piyush Bothra (GMO PG)

Regulatory References:

  • Filed pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Strategic Update and Rationale

The company completed a strategic pivot initiated in February 2026 with four key decisions:

1. Stopped sourcing prime loans through intermediaries

2. Focused capital and people on Emerging Market LAP and GROx businesses

3. Committed to reduce annual costs by ₹220 crore

4. Committed to fund growth without new equity for 3 years with target ROA of 3-3.5% by FY29

The merger of Profectus Capital into UGRO is intended to simplify structure and reduce income volatility by remeasuring excess interest spread on behavioral tenure rather than contractual tenure.

Financial Impact

Proforma Merger Impact (Slide 14 & 15):

  • Proforma Net Worth: ₹2,454 crore (₹158 per share) vs Reported ₹3,029 crore (₹195 per share)
  • Adjustments: ₹308 crore (Profectus goodwill & acquisition costs) + ₹266 crore (remeasurement of excess interest spread)
  • Proforma Capital Adequacy: ~22% (from 18.8% standalone)
  • Proforma H1 PAT: ₹126.3 crore (vs reported ₹118.6 crore)
  • Proforma ROA: 2.7% for H1
  • Proforma ROE: 10.6% for H1

Growth Guidance:

  • Emerging Market LAP: 20-30% annual growth
  • GROx: 35-40% annual growth
  • FY29 Target: Focus businesses to comprise 85% of AUM (currently 53%)

Capital Structure Impact

No immediate equity dilution planned. The company expects to fund growth through FY29 without new equity, supported by:

  • Annuity-led income stream
  • Replacement of lower-yielding book with higher-yielding assets
  • Slow growth in risk-weighted assets relative to disbursements
  • Proforma capital adequacy of ~22% post-merger

#Tags: #UGROCapital #Q2Results #NBFC #ProfectusMerger #SEBIDisclosure #FinancialUpdate #Positive