UGRO Capital Reports 22% Surge in Q2 Net Profit, AUM Grows 20% YoY
UGRO Capital, an MSME-focused NBFC, reported strong Q2 results with net profit up 22% to Rs 433 million and revenue reaching Rs 4.55 billion. Assets Under Management grew 20% year-on-year to Rs 12,226 crore. Net disbursements were Rs 1,789 crore for Q2. The company maintained good asset quality with GNPA at 2.40% and NNPA at 1.50%. CRAR stood at 25.40%. UGRO expanded its co-lending and fintech partnerships, with 43% of AUM now off-book. The company expects improved profitability and operating leverage in upcoming quarters.
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UGRO Capital , a data-tech NBFC focused on MSME lending, has reported a robust financial performance for the second quarter, with significant growth in key metrics.
Strong Financial Performance
The company's net profit for Q2 stood at Rs 433.00 million, marking a substantial 22% increase from Rs 355.00 million in the same quarter last year. This growth was underpinned by a notable rise in revenue, which reached Rs 4.55 billion, up from Rs 3.30 billion in the corresponding period of the previous year.
Assets Under Management (AUM) Growth
UGRO Capital's Assets Under Management (AUM) showed impressive growth, reaching Rs 12,226.00 crore as of September 30, representing a 20% year-on-year increase. This growth in AUM reflects the company's expanding market presence and effective lending strategies in the MSME sector.
Disbursements and Income
The company reported net disbursements of Rs 1,789.00 crore for Q2, contributing to a half-yearly disbursement of Rs 3,388.00 crore. Total income for the quarter stood at Rs 461.00 crore, a 35% increase year-on-year, while the half-yearly income rose to Rs 883.00 crore, up 37% from the previous year.
Asset Quality and Capital Adequacy
UGRO Capital maintained a strong focus on asset quality, with Gross Non-Performing Assets (GNPA) at 2.40% and Net Non-Performing Assets (NNPA) at 1.50% of AUM. The company's provision coverage ratio stood at a healthy 47%, with 93% of assets classified as Stage 1, indicating robust asset quality.
The Capital to Risk-weighted Assets Ratio (CRAR) was reported at 25.40%, well above regulatory requirements, ensuring strong capital headroom for future growth.
Strategic Developments
The company has made significant strides in its co-lending and fintech partnerships, with 43% of its AUM now off-book, spread across 16 co-lending and over 40 fintech partnerships. This diversification strategy helps in risk mitigation and expansion of lending capabilities.
Management Commentary
Shachindra Nath, Founder and Managing Director of UGRO Capital, commented on the results: "Q2 marked a period of strategic recalibration and operational steadiness. With our Emerging Market network now at 303 branches and the Embedded Finance platform scaling rapidly, UGRO is entering a phase of structural profitability improvement."
Future Outlook
With the completion of its physical network expansion and a shift towards branch-level productivity and risk calibration, UGRO Capital is poised for improved operating leverage and sustained value creation in the coming quarters.
The company's focus on data-driven underwriting and its diverse MSME lending portfolio positions it well to capitalize on the growing credit demand in the MSME sector.
UGRO Capital's strong Q2 performance, coupled with its strategic initiatives, sets a positive tone for its growth trajectory in the evolving landscape of MSME financing in India.
Historical Stock Returns for UGRO Capital
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.21% | -2.97% | -5.87% | +4.55% | -27.88% | +57.73% |
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