UGROCAPNSEyear FY26April 21, 2026

Ugro Capital Limited

11,160words
148turns
10analyst 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
Ritu Singh
HEAD, INVESTOR RELATIONS – UGRO CAPITAL LIMITED
Siddharth Rajan
HEAD OF STRATEGY AND
Rahul Jain
ELARA SECURITIES
Key numbers — 40 extracted
85%
9 target and each tracked publicly every quarter. The first, shift EM-LAP and embedded finance to 85% of total AUM by FY29. Second, take out INR 220 crores of annualized costs
INR 220 crore
arter. The first, shift EM-LAP and embedded finance to 85% of total AUM by FY29. Second, take out INR 220 crores of annualized costs. Third run down Prime Intermediated portfolio at 15%
15%
ores of annualized costs. Third run down Prime Intermediated portfolio at 15% to 20% annually. The fourth no incremental equity through FY29, growth funded entirely from inter
20%
annualized costs. Third run down Prime Intermediated portfolio at 15% to 20% annually. The fourth no incremental equity through FY29, growth funded entirely from internal acc
3%
from internal accruals. The fifth transition to be steady-state annuity-led, largely cash ROA of 3% to 3.5% by FY29, with negligible contribution from co-lending and direct assignment income. I w
3.5%
internal accruals. The fifth transition to be steady-state annuity-led, largely cash ROA of 3% to 3.5% by FY29, with negligible contribution from co-lending and direct assignment income. I will clos
33%
lanned, while the focus verticals are growing strongly. The mix of focus verticals has moved from 33% to 38% of total AUM in a single quarter, the fastest quarterly shift on record. We are on track.
38%
while the focus verticals are growing strongly. The mix of focus verticals has moved from 33% to 38% of total AUM in a single quarter, the fastest quarterly shift on record. We are on track. Net t
51%
e quarter, the fastest quarterly shift on record. We are on track. Net total income for Q4 grew 51% year-on-year and 34% quarter-on-quarter. PAT grew 26% year-on-year. Q4 also carries a one-time re
34%
t quarterly shift on record. We are on track. Net total income for Q4 grew 51% year-on-year and 34% quarter-on-quarter. PAT grew 26% year-on-year. Q4 also carries a one-time restructuring cost of a
26%
are on track. Net total income for Q4 grew 51% year-on-year and 34% quarter-on-quarter. PAT grew 26% year-on-year. Q4 also carries a one-time restructuring cost of about INR 25 crores, which was t
INR 25 crore
ter-on-quarter. PAT grew 26% year-on-year. Q4 also carries a one-time restructuring cost of about INR 25 crores, which was the cost of executing the transition cleanly. Excluding that, the underlying earnings
Guidance — 20 items
Siddharth Rajan
opening
“FY26 and Q4’FY26 financials are on a consolidated basis, including Profectus Capital and Data Science Technologies Private Limited, whose acquisition was completed on December 8, 2025 and March 18, 2026, respectively.”
Siddharth Rajan
opening
“FY25 and Q4’FY25 comparatives are on a standalone UGRO Capital basis.”
Shachindra Nath
opening
“When we announced the realignment in February, we made five commitments, each with a measurable FY29 target and each tracked publicly every quarter.”
Shachindra Nath
opening
“The first, shift EM-LAP and embedded finance to 85% of total AUM by FY29.”
Shachindra Nath
opening
“The fourth no incremental equity through FY29, growth funded entirely from internal accruals.”
Shachindra Nath
opening
“The fifth transition to be steady-state annuity-led, largely cash ROA of 3% to 3.5% by FY29, with negligible contribution from co-lending and direct assignment income.”
Anuj Pandey
opening
“Q4’FY26 is the first full quarter of the realignment in execution.”
Anuj Pandey
opening
“This will reduce to INR 490 crores plus in FY27.”
Anuj Pandey
opening
“Vintage branches, which are older than 12 months, are producing INR 68 lakhs per month in disbursements, approaching the management target of about INR 80 lakhs per month.”
Anuj Pandey
opening
“Hundreds of millions of digitally transacting merchants in India, which are the vast majority without working capital credit matched to their cash flows, is the target segment for this business.”
Risks & concerns — 11 flagged
I want to understand why such a big change in the strategy on two fronts: one, eliminating a part of the business which contributed to 70% of your total AUM, and suddenly moving to such granular - I mean, such small-ticket loans where the risk is a lot higher.
— Sameer Dalal
We recognized this core challenge around two-and-a-half years back and we were internally building the branch network to enter into small-ticket LAP segment, and that network we built and took all the opex upfront in last three years itself.
— Shachindra Nath
However, there is structural challenge which we recognized over last two, two-and-a-half years.
— Shachindra Nath
So, when you take the asset on the balance sheet, you have an interest income which you calculate, while in co-lending it becomes volatile.
— Shachindra Nath
So adjusted for the yield and credit cost, this is a superior ROA business without changing the overall risk profile of UGRO.
— Shachindra Nath
What would be a number of gross NPAs that we can expect to see in that business, and before which there would be a cause of concern or something that would make you think about this business strategy?
— Sameer Dalal
It's very difficult to, so the way to simplest term, you should think of this way.
— Shachindra Nath
Are the risk weights on the embedded finance business higher than the previous business that we are structuring away from?
— Chetan
So, the embedded finance risk weight is same as any other loan as far as regulation is concerned, because all these are MSME loans, whether they are secured or unsecured, which is 100%.
— Anuj Pandey
As things progress, the cost, as the overall yields will face a downward pressure.
— Anuj Pandey
The global environment is genuinely uncertain: geopolitical tension, trade policy shift, risk appetite recalibrating.
— Shachindra Nath
Q&A — 10 exchanges
Q
Sir, can you please explain the process of saving INR 200 crores to INR 220 crores annually?
Anuj Pandey
So, this INR 220 crores of cost save was on account of two strategic decisions which we took last year. The first was the acquisition of Profectus, and if you recall, one of the objectives of that acquisition was opex rationalization. Profectus was also in MSME lending business with about INR 3,000 crores of AUM with a very large workforce. UGRO also had a very similar workforce catering to the same business. So, when we acquired Profectus, there was a duplicacy in opex and we had identified about INR 120-odd crores of cost which we had taken out at the time of acquisition. Additionally, in Fe
Q
Yes, hello, Mr. Shachindra Nath. I unfortunately wasn't there for the last con-call, which is why I'm going to ask this question. I want to understand why such a big change in the strategy on two fronts: one, eliminating a part of the business which contributed to 70% of your total AUM, and suddenly moving to such granular - I mean, such small-ticket loans where the risk is a lot higher. The second, co-lending was something that you had always specified. I remember you had done a meet with all the investors and analysts and all of that where you said that we were one of the pioneers in the co-
Shachindra Nath
Yes, no, thank you. I think a lot of this we answered in the last quarter call as well. But I will, for the benefit of those who are joining for the first time, I will summarize it. So, I think you asked three specific questions, and I'll answer them in that order. First and foremost, that why we decided to exit from lower yielding, what you said probably your understanding of a better credit profile customer. So, I'll answer that first. So, you're right, UGRO was always designed and built for scale. When we started in 2018, we started with INR 1,000 crores of capital. Over a period of our sev
Q
Hi, Shachin, hi, Anuj. Congrats on a good set of numbers and consolidation of Profectus. I just wanted to just re-confirm the final equity -- I don't know if it's -- I joined late so it may have been clarified on the call earlier, but just what will be our fully diluted equity for the sake of full clarity? Any pending conversions of CCDs or what we are seeing in March end is...
Shachindra Nath
No, so, Amitabh, now what you are seeing is only 2 lakh shares is pending conversion. Only 2 lakh shares which is pending conversion; somebody's request has not come. Otherwise, what you are seeing is a fully diluted shareholding. So total outstanding share should be INR 15.29 crores, yes. Okay, so what is reflecting in the March balance sheet is your final, almost, effectively your fully diluted equity. Yes, yes. 2 lakh shares to be converted Okay. And there is no further dilution of warrants or anything from the past that you see? Nothing. No, everything is done. Everything is done. So, and
Q
Hello. Hi, Mr. Nath. Congrats on the good set of numbers. I wanted to ask about the embedded finance business. Are the risk weights on the embedded finance business higher than the previous business that we are structuring away from? And do our NPAs overall, do they include repossessed assets, and how do we resolve repossessed assets that we have gotten in the last five years?
Anuj Pandey
Yes. So, the embedded finance risk weight is same as any other loan as far as regulation is concerned, because all these are MSME loans, whether they are secured or unsecured, which is 100%. And on the repossessed assets, yes, we have been repossessing assets now and have very good experience on them for last three-four years. Typically for assets greater than INR 20 lakh ticket size, we use SARFAESI. And the typical timeline of resolution in our portfolio is between 12 to 15 months post the NPA. It typically takes about 3 months to get the SARFAESI order and then about 3 to 6 months for a suc
Q
Hi. Thank you for the opportunity. I had a couple of questions. First is, Mr. Nath, given that for the last 2-2.5 years we were planning to move to a high-yielding book, what was the rationale now to acquire Profectus, whose yield is, I think, was much similar or compare, I think the ROA was sub 1% for it? And today, after acquisition, we are now running down part of their book and laying off people. So, first question was, like, why make the acquisition when our intent was always to move towards higher yield?
Shachindra Nath
Yes, can I answer that first? Yes, yes, sure. I have two other questions; I'll just hold up. No problem, we'll come back to that. So, the reason why we could transition to this is because - - one of the reasons was because of Profectus. As you would remember that we said that we have been building the branch network. This branch network got matured to around 300-odd. But the real profitability flow from this branch network would happen over a period of next two years. What Profectus helped us is exactly what when we rationalized. So, obviously, we had this in mind that we have to rationalize.
Q
Yes, hi, Mr. Nath. Congratulations on a set of good numbers. I mean, I have a question regarding the Profectus. I mean, I think you partially answered that for the previous caller but wanted to know the school financing that Profectus is doing. Is that part of what's been stopped or is that still continuing? And if so, is that a third vertical?
Anuj Pandey
Hi, Rishi, this is Anuj. The school financing book of Profectus was primarily a Prime DSA- sourced book at an average yield of about 13%. While we don't want to get into that segment, but it's a product and there is a lot of insights as an institution. What we are doing is, we are expanding that products in our top 50 emerging market locations. We will start doing schools, but of a smaller size at a relatively higher interest rate. We'll continue this program, but with a little different perspective and policy. So, the target schools would be from size perspective smaller and in Tier 2, Tier 3
Q
Good evening, team. Thank you so much for taking my question. Firstly, congratulations on a great set of results. So just wanted to ask if I understand it correctly. So, our primary business that we were having the prime intermediatory, we are going to run it down. But currently it's the most significant portion of the AUM and our emerging market and embedded finance, which are the lower portions are going to increase right now. So, for FY27, will we have the similar profitability, because how would that work? I'm assuming it would be a higher profitability than what we had in FY26. So just wa
Shachindra Nath
So, there are two things. One, FY27 is a transition year. In the year of transition, there are three things which we are endeavouring to do. First, obviously, making sure that our emerging market network and our merchant lending network, especially the emerging market LAP network, start maturing to good productivity, which is what we are targeting from current base to roughly around INR 60 lakh, INR 70 lakhs per branch basis. That's point one. Second, we are looking to transition and benefit from the cost save and transition our co-lending income, which is currently 25% of our total income to
Q
So actually, currently what I'm seeing since the last few quarters that like either AUM is not growing or de-growing. So, when can we expect some growth? Because earlier, two years back or three years back, it was told that, okay, we will be growing continuously for five years, 30- plus. And then like -- and then now it is like de-growing. So, when we can expect the curve to come back to the growth phase?
Shachindra Nath
Yes, you're absolutely right. I think so that our aspiration has always been to build a business of size and scale, because obviously we were motivated by the size of the opportunity in front of us. We were motivated by the core capability of the management and the kind of deployment of data analytics and technology we did, and we were very confident that -- or we were, you know, motivated by the fact that we can build a very large franchise. Having said that, over a period of last two-three years, as I said, you know, in answer to a few other people, what we realized that between choice of sc
Q
Hello, sir. Thank you so much for the opportunity. Sir, currently what percentage of our book is LAP versus non-LAP and how do the GNPA, yields, and the credit costs compare across both these segments?
Anuj Pandey
So, our total secured portfolio which I am including Machinery Loans also because they behave similarly is about 67% of the total portfolio, and the GNPAs there are in the range of about 1.5%. Our embedded finance portfolio is about INR 2,280 crores, which is about 15-odd percent of the total portfolio. Here the GNPAs are about 1.7%, and there are certain products which we had discontinued last year, which included Supply Chain Finance, we used to do a relatively liberal collateral product within LAP which we used to call Saathi, and some unsecured loans. That all put together is about 3.2% GN
Q
Thank you. I want to close with a context on macro factors affecting global economy and its impact on UGRO. We get a lot of questions on that as well. The global environment is genuinely uncertain: geopolitical tension, trade policy shift, risk appetite recalibrating. India is not fully insulated. And yet I'm more confident in UGRO's trajectory today than at any point in our history. The business we have chosen - small-ticket secured loan against property in Tier 2 and beyond regions of Bharat and merchant financing embedded in payment flows are not driven by the global macro. They are driven
Management
Speaking time
Shachindra Nath
34
Anuj Pandey
31
Moderator
12
Amitabh Sonthalia
10
Mehul Panjuani
10
Sameer Dalal
9
Saurabh Kumar
9
Rohit Arora
7
Adarsh J
7
Shilpa Bhatter
5
Opening remarks
Rahul Jain
Thanks, Rutuja. Good evening, everyone. We have with us the senior management team of UGRO Capital, Mr. Shachindra Nath, Founder and Managing Director; Mr. Anuj Pandey, CEO; Ms. Shilpa Bhatter, CFO; Ms. Ritu Singh, Head IR; and Mr. Siddharth Rajan, Head of Strategy. Over to you, Sir.
Siddharth Rajan
Thank you, Rahul. Good evening, everyone. I am Siddharth Rajan, Head of Strategy and FP&A, and I welcome you to UGRO Capital's Q4’FY26 and full-year FY26 earnings call. On behalf of the management team, I am delighted to welcome all of you today. Before we proceed, I would like to draw your attention to the basis of comparison. FY26 and Q4’FY26 financials are on a consolidated basis, including Profectus Capital and Data Science Technologies Private Limited, whose acquisition was completed on December 8, 2025 and March 18, 2026, respectively. FY25 and Q4’FY25 comparatives are on a standalone UGRO Capital basis. All year-on-year references in today's discussion should be read with this change of scope in mind. I will now hand over to Mr. Shachindra Nath for his opening remarks. Over to you, Sir.
Shachindra Nath
Thank you, Siddharth. Good evening, everyone, and thank you for joining us. Before I hand over to Anuj, let me set the strategic context and long-term frame. On February 7, 2026, we communicated a structural realignment. The rationale was simple. After three years of building a 317 branch Emerging Market field network, acquiring MyShubhLife for embedded finance, and acquiring Profectus Capital, the franchise was ready to stop doing all things and focus entirely on two verticals where UGRO has proprietary origination, superior data, and demonstrably better credit outcomes. The intermediated, DSA-led book - Business Loans, Machinery Loans, Prime LAP was yield- dilutive, capital-intensive in the wrong way, and not aligned with what we are building, EM- LAP and Embedded Finance are. The decision was therefore clear: stop the non-focus book and concentrate every unit of capital, distribution, and management attention on the two verticals built for long-term annuity compounding. When we anno
Anuj Pandey
Thank you, Shachin. Good evening, everyone. I will cover the operational performance this quarter and walk through the two businesses that are driving our next phase. Q4’FY26 is the first full quarter of the realignment in execution. Let me give you the numbers first and then walk you through the operational detail behind them. AUM is broadly flat quarter-on-quarter. That is intentional. The non-focus intermediated book is running down as planned, while the focus verticals are growing strongly. The mix of focus verticals has moved from 33% to 38% of total AUM in a single quarter, the fastest quarterly shift on record. We are on track. Net total income for Q4 grew 51% year-on-year and 34% quarter-on-quarter. PAT grew 26% year-on-year. Q4 also carries a one-time restructuring cost of about INR 25 crores, which was the cost of executing the transition cleanly. Excluding that, the underlying earnings trajectory is exactly where we said it would be. On the cost program, the consolidated ope
Shilpa Bhatter
Thank you so much, Anuj. Good evening, everyone. Please allow me to take you through the numbers in more detail. Interest income was at INR 415 crores in Q4, which was up 57% year- on-year and 26% quarter-on-quarter. Recurring net interest income on our balance sheet is strong. As the focus verticals grow, this line expands as a share of total revenue. Co-lending and direct assignment income was INR 155 crores, up 30% year-on-year. This line will reduce proportionally as intermediated disbursements stop, and this is purely by design as we replace it with on-book interest income that accretes to net worth. Fee and commission income for Q4 was INR 33 crores, covering essentially prepayment income on loans and certain income on loan documentation charges and service fees. Other income was INR 25 crores, comprising of insurance distribution fees on borrower covers that we take, income from incidental debt syndication we earn when we arrange financing for MSME customers whose financial need
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