UGRO Capital Posts Strong Q1 Results With 31% AUM Growth and Expanding MSME Reach

UGRO Capital Limited, a DataTech-driven NBFC focused on MSME lending, has reported robust financial results for the quarter ended June 30, 2025 (Q1 FY26), underscoring its continued momentum in embedded finance, emerging market expansion, and strategic capital initiatives. The company’s performance reflects disciplined growth, stable asset quality, and a deepening footprint across underserved segments.

Here’s a comprehensive breakdown of UGRO’s Q1 performance and strategic developments.

Performance Snapshot: Key Metrics and Financial Growth

1. Assets Under Management (AUM) rose to INR 12,081 crore, marking a 31 percent year-on-year increase  
2. Total Income reached INR 421.8 crore, up 40 percent YoY and 2 percent sequentially  
3. Net Total Income stood at INR 216.5 crore, up 31 percent YoY  
4. Profit After Tax (PAT) came in at INR 34.1 crore, a 12 percent YoY rise despite seasonal softness  
5. Gross and Net NPAs remained stable at 2.5 percent and 1.7 percent respectively  
6. Capital Adequacy Ratio (CRAR) stood at 22.4 percent, well above regulatory thresholds  

Embedded Finance and Emerging Market Expansion

UGRO’s embedded finance platform continues to scale rapidly, supported by partnerships with fintech players such as PhonePe and BharatPe. The segment achieved:

- INR 1,011 crore in AUM as of Q1 FY26  
- INR 582 crore in disbursements during the quarter via the MSL platform  

Simultaneously, UGRO’s Emerging Market Business expanded its branch network:

- 309 branches operational as of June 30  
- Targeting ~346 branches by September 2025  
- AUM in this segment reached INR 2,772 crore  

These initiatives are central to UGRO’s strategy of building a data-led MSME lending institution with deep regional penetration and tech-enabled credit delivery.

Strategic Actions: Capital Raise and Acquisition Progress

UGRO made significant strides in strengthening its balance sheet and expanding its lending capacity:

- Completed a rights issue worth INR 381 crore  
- Ongoing preferential issue of INR 911 crore  
- Advanced the INR 1,400 crore all-cash acquisition of Profectus Capital, with shareholder approval secured and regulatory clearances underway  

These moves are expected to enhance UGRO’s lending capabilities, diversify its portfolio, and support calibrated growth across segments.

Operational Discipline and Portfolio Quality

Despite Q1 being seasonally softer, UGRO maintained underwriting discipline:

- Disbursements totaled INR 1,599 crore, up 39 percent YoY but down 34 percent sequentially  
- Credit cost stood at INR 47.7 crore, reflecting prudent provisioning  
- Operating expenses rose 35 percent YoY to INR 120.6 crore, aligned with branch expansion and platform investments  

The company tightened borrower leverage filters, prioritizing quality over pace in originations.

Partner Ecosystem and Liability Management

UGRO’s partner ecosystem continues to grow, enabling tailored credit solutions for MSMEs:

- 17 co-lending partners and over 50 lenders  
- 770+ GRO partners and Green anchor partners  
- Off-book share at 42 percent, supported by co-lending and direct assignment flows  
- Total debt stood at INR 7,586 crore as of June 30  

The company also improved its cost of funds and diversified liabilities, reinforcing its financial resilience.

Conclusion: UGRO Capital Accelerates Toward MSME Lending Leadership

UGRO Capital’s Q1 FY26 results reflect a well-balanced approach to growth, risk management, and strategic expansion. With strong financial metrics, expanding embedded finance and branch networks, and ongoing capital initiatives, the company is well-positioned to become India’s leading data-driven MSME lender. Its disciplined execution and evolving partner ecosystem continue to unlock credit access for underserved businesses across the country.

Sources: PR Newswire, MediaBrief, BSE India