UGROCAPNSENovember 10, 2025

Ugro Capital Limited

4,461words
77turns
7analyst exchanges
6executives
Management on call
Shachindra Nath
FOUNDER AND MANAGING
Anuj Pandey
CHIEF EXECUTIVE OFFICER – UGRO CAPITAL LIMITED
Shilpa Bhatter
CHIEF FINANCIAL OFFICER – UGRO CAPITAL LIMITED
Sameer Nanda
CHIEF REVENUE OFFICER – UGRO CAPITAL LIMITED
Ritu Singh
SENIOR ECONOMIST AND HEAD,
Shweta Daptardar
ELARA CAPITAL
Key numbers — 40 extracted
rs,
tember 2025. Q2’FY26 was a period of strategic recalibration for UGRO Capital. Over the past 3 years, we have consistently added around INR3,000 crores to our AUM annually, reflecting the strength of
INR3,000 crore
ategic recalibration for UGRO Capital. Over the past 3 years, we have consistently added around INR3,000 crores to our AUM annually, reflecting the strength of our franchise and the scalability of our data te
INR3,000 crore
ch-driven model. With the proposed acquisition of Profectus Capital, which will add approximately INR3,000 crores inorganically and take our total AUM over INR15,200 crores, we consciously moderated disbursal t
INR15,200 crore
s Capital, which will add approximately INR3,000 crores inorganically and take our total AUM over INR15,200 crores, we consciously moderated disbursal this quarter to optimize our liability requirement and borro
INR12,226 crore
in the small ticket MSME segment. As of September 30, 2025, our asset under management stood at INR12,226 crores, up 20% year-on-year. Our calibrated disbursals on account of tightened underwriting are recorde
20%
MSME segment. As of September 30, 2025, our asset under management stood at INR12,226 crores, up 20% year-on-year. Our calibrated disbursals on account of tightened underwriting are recorded at IN
INR1,789 crore
0% year-on-year. Our calibrated disbursals on account of tightened underwriting are recorded at INR1,789 crores in Q2 and INR3,380 crores in H1’FY26. Following signs of overleverage, we have curtailed through
INR3,380 crore
ibrated disbursals on account of tightened underwriting are recorded at INR1,789 crores in Q2 and INR3,380 crores in H1’FY26. Following signs of overleverage, we have curtailed throughput rates from 30% to 20%
30%
3,380 crores in H1’FY26. Following signs of overleverage, we have curtailed throughput rates from 30% to 20% and tightened underwriting filters. These risk management measures, combined with a strong
35%
ery structure, ensures portfolio resilience and consistent profitability. Our total income grew 35% year-on-year to INR461 crores and PAT rose to INR43 crores, up 22% year-on-year and 27% quarter-o
INR461 crore
es portfolio resilience and consistent profitability. Our total income grew 35% year-on-year to INR461 crores and PAT rose to INR43 crores, up 22% year-on-year and 27% quarter-on-quarter. Asset quality rema
INR43 crore
nsistent profitability. Our total income grew 35% year-on-year to INR461 crores and PAT rose to INR43 crores, up 22% year-on-year and 27% quarter-on-quarter. Asset quality remained stable with GNPA at
Guidance — 20 items
Shweta Daptardar
opening
“On behalf of Elara Securities, we welcome you all to Q2’FY26 Earnings Conference Call of UGRO Capital Limited.”
Shachindra Nath
opening
“Q2’FY26 was a period of strategic recalibration for UGRO Capital.”
Shachindra Nath
opening
“Our calibrated disbursals on account of tightened underwriting are recorded at INR1,789 crores in Q2 and INR3,380 crores in H1’FY26.”
Shachindra Nath
opening
“We added 90 branches in first half of FY26 and now have 303 branches across 13 states with asset under management reaching to INR2,997 crores, contributing now to 25% of our total asset under management.”
Shachindra Nath
opening
“We expect that the Profectus acquisition, which is entirely an on-balance sheet business, our combined off-book AUM will moderate to around 35%.”
Shivam Singh
qa
“But sir, when do we plan to accelerate on it?”
Anuj Pandey
qa
“We anticipate that in the next 2 quarters, things will start improving and the throughput accordingly will look to improve.”
Meghna Luthra
qa
“What do you see credit cost pan out for second half of FY26?”
Meghna Luthra
qa
“And just lastly, on the AUM growth, sir, how do you see that pan out in the second half this year or in FY27?”
Shachindra Nath
qa
“Given that the management attention to establishing new branches is completely over, in next - - first target in the next 12 months is that this block of 88 branches reaches to roughly around INR70 lakh to INR1 crores of disbursement.”
Risks & concerns — 8 flagged
These risk management measures, combined with a strong on- ground collection and 4-Tier recovery structure, ensures portfolio resilience and consistent profitability.
— Shachindra Nath
We remain confident in our mission of solving the unsolved, bridging the MSME credit gap in India through the power of data, technology and prudent risk management.
— Shachindra Nath
One, sir, can you please highlight - on geographies stressed or over- leveraging – or some colour on the stress part on the ticket sizes or segment?
— Meghna Luthra
Sir, I just wanted some more color on the ticket sizes or the geographies or the sectors in which are showing stress and which are not showing stress.
— Meghna Luthra
While there are no specific geographies or sectors, which are showing higher stress.
— Anuj Pandey
We saw a little bit of stress in segment, which are adjacent to microfinance.
— Anuj Pandey
But other than that, across while leverage is high, there is no particular segment, which is showing higher than usual stress in our portfolio.
— Anuj Pandey
Sir, could you tell me what are the key tech initiatives undertaken by the management that have been enabled better underwriting and risk management practices and also your long-term ROE and ROA targets?
— Mohit Oza
Q&A — 7 exchanges
Q
Congratulations on the great results. Sir, there was a green shoe option of INR100 crores in a bond raise that we did right now. That was at 11.65%. Sir, since we are working on bringing our cost of capital down, sir, why would we raise capital at such a high interest rate and that too for 5.5 years?
Shilpa Bhatter
Thank you so much for your question. So we have just now raised subordinated debt from the debt capital market. And therefore, you see that the coupon there is 11.65%. And essentially, as per the RBI guidelines, an instrument to qualify as subordinated debt needs to be 5 years plus in maturity. And therefore, we've done that. And given the fact that subordinated debt forms as Tier 2 capital for the company, we were very happy to raise this debt, and we have seen an overwhelming response as well for our raise that we have done of subordinated debt. Just to add what Shilpa said, sir, you should
Q
I had a couple of questions. One, sir, can you please highlight - on geographies stressed or over- leveraging – or some colour on the stress part on the ticket sizes or segment?
Anuj Pandey
We lost you in between. Can you just repeat? Am I audible now? Yes, you are. Sir, I just wanted some more color on the ticket sizes or the geographies or the sectors in which are showing stress and which are not showing stress. Can you please provide some color on that? While there are no specific geographies or sectors, which are showing higher stress. But in general, for micro and small SMEs, we have seen a little bit of higher overleverage. We used to do in emerging markets loans between INR5 lakh to INR50 lakhs ticket size. But for last 2 quarters, we stopped doing loans less than INR7.5 l
Q
Sir, could you tell me what are the key tech initiatives undertaken by the management that have been enabled better underwriting and risk management practices and also your long-term ROE and ROA targets?
Anuj Pandey
So we have been great believers of data science since day 1. Our year-on-year investment on -- especially on our proprietary scoring model called GRO Score is now what is yielding results. While we -- the early warning system, which has got developed on basis that is also showing us a little better anticipatory value. And that is why we have been able to take calls a little earlier than industry. Separately, through our MSL acquisition last year, which was primarily on basis of MSL's top- of-the-line tech platform for embedded finance, the portfolio has built very -- in a very healthy way last
Q
Yes. I want to ask about further equity dilution. We have -- after this current round of equity dilution or raising the capital, until how much AUM this will be adequate? And when additional capital will be required? Is it around INR18,000 crores AUM that our -- we will need further capital? We need to just know about that future raising of the capital. And are we going to raise it at only 1x of the book value if the market price doesn't go up -- market cap doesn't go up? Or what do we intend to do about it?
Shachindra Nath
Sir, as you might have seen that our model necessitated that almost at every point of time when we reach roughly around 18% of capital adequacy, we need to raise more capital. Given the kind of growth, which we have been getting over the last 4 years, every 1 year, 1.5 years, around 18 months, we were raising capital; however, we realized that market acceptance of -- or market pricing for UGRO has not caught up with the kind of growth and platform we have delivered. That's why we raised both rights issue money and preferential allotment of CCD in June this year. Incidentally, as soon as we acq
Q
In past 1.5 years, CCDs have been issued and capital has been raised from that. And those are coming to an end and conversion would happen to the shares. Some people would book profit there as well. So how do you think it's going to affect the PE of the company, equity dilution in current shape of the firm, if you can throw some light on that?
Shachindra Nath
Sorry, I'm not clear with your question. You're saying that on a fully diluted basis, what would be the PE of the company? Is that what you're saying? Yes, like the selling of the CCD will be converted to shares and selling of that will happen. So how do you expect PE is going to be affected, equity dilution is going to be affected? What is your view on the future on that? No, I'm not very clear. So today, our outstanding number of shares is INR12-odd crores. Post -- when all of this equity would convert, which should happen in the month of December, the total fully diluted number of shares wo
Q
I have a question regarding what exactly happened in the recent notes. So the communication staff said that Samena reduced their actual conversion based on the company's request...
Shachindra Nath
Sorry, we can't hear you at all. I am very sorry. Just give me 1 second. Can you hear me now? Yes. Yes. So based on the communication to the Exchange, we know that Samena had reduced their allocation based on the company's request. So the question is, so they are left with outstanding warrants at this point in time. And our agents and others have been compensated for the 12% that they have paid upfront for the warrants as well. Could you just let us know how much of the warrants is now still remaining and not extinguished? And well, I mean, of course, it depends on the market price to see if t
Q
Thank you, everyone, for patiently listening to us. If you have any further questions, you may get in touch with Ritu or to any of us directly. We would be happy to answer and clarify. Thank you for your time.
Management
Speaking time
Shachindra Nath
22
Anuj Pandey
13
Meghna Luthra
10
Moderator
9
Rishi
8
Moid Ansari
7
Shivam Singh
2
Mohit Oza
2
Ayush
2
Shweta Daptardar
1
Opening remarks
Shweta Daptardar
Thank you, Arshi. Good evening, everyone. On behalf of Elara Securities, we welcome you all to Q2’FY26 Earnings Conference Call of UGRO Capital Limited. From the esteemed management, we have with us today, Mr. Shachindra Nath, Founder and Managing Director; Mr. Anuj Pandey, Chief Executive Officer; Ms. Shilpa Bhatter, Chief Financial Officer; Mr. Sameer Nanda, Chief Revenue Officer; Ms. Ritu Singh, Senior Economist and Head, Investor Relations. We express our gratitude towards the management of UGRO to provide us the opportunity to host this conference call. Without further ado, I now hand over the call to Mr. Shachindra Nath, Founder and Managing Director, for his opening remarks, post which we can open the floor for Q&A. Thank you, and over to you, sir.
Shachindra Nath
Thank you. Good evening, everyone. Welcome to UGRO Capital's Earnings Call for the second quarter and half year ended 30th September 2025. Q2’FY26 was a period of strategic recalibration for UGRO Capital. Over the past 3 years, we have consistently added around INR3,000 crores to our AUM annually, reflecting the strength of our franchise and the scalability of our data tech-driven model. With the proposed acquisition of Profectus Capital, which will add approximately INR3,000 crores inorganically and take our total AUM over INR15,200 crores, we consciously moderated disbursal this quarter to optimize our liability requirement and borrowing costs. This prudent approach supported by tightened underwriting aligns with the prevailing macro headwinds in the small ticket MSME segment. As of September 30, 2025, our asset under management stood at INR12,226 crores, up 20% year-on-year. Our calibrated disbursals on account of tightened underwriting are recorded at INR1,789 crores in Q2 and INR3
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