Ushakiran Finance reported a net loss of ₹4.36 lakh for FY26, a sharp reversal from the ₹24.38 lakh profit recorded in FY25. The decline was driven by an 18% drop in gross income to ₹47.23 lakh, alongside higher impairment charges on financial instruments.

The company, classified as a non-systemically important non-deposit taking NBFC under RBI's scale-based regulation framework, will hold its 40th Annual General Meeting on September 29, 2026. The meeting aims to adopt audited financial statements and approve the reappointment of director T. R. Sekhar.

Financial Performance

Gross income for the year ended March 31, 2026, stood at ₹47.23 lakh, down from ₹55.40 lakh in the previous year. Interest income from loans and advances decreased to ₹17.44 lakh from ₹21.65 lakh. Dividend income remained stable at ₹10.83 lakh, while net gains on fair value changes rose to ₹17.71 lakh against ₹9.44 lakh last year.

Other income contracted significantly to ₹0.35 lakh from ₹12.34 lakh, primarily due to the absence of bad debt recoveries that contributed ₹12.00 lakh in FY25. Total expenses increased to ₹45.53 lakh from ₹26.00 lakh, largely influenced by a ₹16.84 lakh net loss on fair value changes in mutual funds, compared to nil in the prior period.

*Proxy calculated as Profit before Depreciation, Finance Costs, and Tax.

Balance Sheet Signals

Total assets declined to ₹1,353.77 lakh from ₹1,684.11 lakh. Investments, which constitute the bulk of the asset base, fell to ₹1,217.42 lakh from ₹1,569.91 lakh. Cash and cash equivalents dropped sharply to ₹8.25 lakh from ₹28.89 lakh, reflecting reduced liquidity buffers.

Loans outstanding increased to ₹83.03 lakh (net) from ₹63.18 lakh, with gross loans rising to ₹119.73 lakh from ₹98.17 lakh. Credit-impaired loans remained relatively stable at ₹27.48 lakh. The current ratio eased to 10.63 from 16.92, indicating a tightening of short-term liquidity relative to liabilities.

What the Numbers Show

The profitability shift is heavily influenced by non-recurring items. In FY25, other income included ₹12.00 lakh from bad debt recoveries, which constituted nearly half of the total other income. The absence of such recoveries in FY26, combined with a ₹16.84 lakh fair value loss on mutual fund investments, turned a modest pre-tax profit of ₹1.70 lakh into a net loss. Operational interest income declined moderately, suggesting underlying lending activity remains present but less lucrative than the prior year's recovery-driven results.

Corporate Governance

The Board of Directors did not recommend a dividend for FY26 to conserve resources. No transfers were made to the General Reserve. T. R. Sekhar, who retires by rotation, offers himself for reappointment. The company has no subsidiaries, joint ventures, or associate companies. Statutory auditors NSVR & Associates LLP issued an unqualified report, noting adequate internal financial controls.

Ushakiran Finance Limited reported a net profit of ₹8.47 lakh for the quarter ended June 30, 2026 (Q1FY27), an 18% increase from ₹7.17 lakh in the same period last year. This result marks a significant turnaround from the net loss of ₹8.75 lakh recorded in the preceding quarter, primarily driven by positive fair value adjustments on its investment portfolio rather than operational efficiency. Total revenue from operations reached ₹19.93 lakh, up from ₹17.76 lakh year-on-year, indicating stability in core income streams despite volatility in mark-to-market accounting.

The Board of Directors approved the unaudited financial results on August 3, 2026, following a review by statutory auditors M/s. NSVR & Associates LLP. The filing was made pursuant to Regulations 30 and 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In addition to financial approvals, the Board recommended the reappointment of T.R. Sekhar as a Non-Executive Non-Independent Director, subject to shareholder approval at the upcoming Annual General Meeting.

Financial Performance

The company’s revenue structure remains heavily influenced by fair value changes rather than traditional interest or dividend income. While interest income grew modestly to ₹5.26 lakh from ₹4.15 lakh year-on-year, and dividend income increased to ₹1.46 lakh from ₹0.76 lakh, the primary driver of revenue growth was net gain on fair value changes, which stood at ₹13.21 lakh compared to ₹12.85 lakh in Q1FY26.

Expenses for the quarter totaled ₹9.60 lakh, a significant decrease from ₹18.46 lakh in Q4FY26. This reduction was largely due to the absence of net losses on fair value changes, which had impacted the previous quarter by ₹12.60 lakh. Employee benefits expense remained stable at ₹3.41 lakh, while other expenses were ₹5.66 lakh.

Corporate Governance Updates

Alongside financial results, the Board addressed key governance matters. It approved the Secretarial Audit Report for the year ended March 31, 2026, and the Directors’ Report with annexures. The 40th Annual General Meeting (AGM) is scheduled for September 29, 2026, to be held via Video Conferencing/Other Audio Visual Means (OAVM). The register of members will remain closed from September 23 to September 29, 2026, with the record date set for September 22, 2026.

Mr. N. Mallikarjuna Rao, Partner at M/s. Mallikarjun Rao and Associates, has been appointed as Scrutinizer for the AGM. The reappointment of T.R. Sekhar, who retires by rotation, is based on recommendations from the Nomination and Remuneration Committee. He currently serves as Executive Director of Sigachi Laboratories Limited and is the son of company director T. Adinarayana.

What the Numbers Show

The volatility in Ushakiran Finance’s quarterly results underscores its dependency on mark-to-market accounting for investments. The swing from a loss of ₹8.75 lakh in Q4FY26 to a profit of ₹8.47 lakh in Q1FY27 is not driven by operational efficiency but by the reversal of fair value losses. With total comprehensive income reaching ₹128.48 lakh, largely due to other comprehensive income items that will not be reclassified to profit or loss, investors should note that the underlying cash-generating ability from interest and dividends remains modest relative to the balance sheet size.