U Y Fincorp Financials: Q2 Growth Masks FY25 Profit Dip

Introduction to U. Y. Fincorp's Financial Landscape

U. Y. Fincorp Limited, a Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India, is scheduled to announce its financial results for the third quarter on February 4, 2026. Ahead of this announcement, an analysis of its recent performance reveals a mixed picture. The company has demonstrated robust sequential growth in its recent quarters, but its full-year results for the financial year 2025 show a significant contraction compared to the previous year. This report examines the key financial metrics from its income statement, balance sheet, and recent quarterly announcements to provide a comprehensive overview of its current standing.

Strong Sequential Growth in FY26 Quarters

U. Y. Fincorp reported strong performance in the first half of the financial year 2026. For the quarter ending September 2025, the company's revenue grew by 23.92% to ₹27.66 crore from ₹22.32 crore in the June 2025 quarter. This top-line growth was accompanied by even stronger expansion in profitability. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) increased by 34.63% to ₹11.74 crore, while net profit surged by 35.51% to ₹8.09 crore over the same period. This indicates improving operational efficiency and margin expansion during the quarter.

The performance in the June 2025 quarter was also notable. Revenue for Q1 FY26 stood at ₹22.32 crore, a 70.58% increase year-on-year compared to ₹13.09 crore in June 2024. The net profit for the quarter was ₹5.97 crore, marking a substantial 219.78% year-on-year increase from ₹1.87 crore.

Annual Performance for FY25

In contrast to the recent quarterly momentum, U. Y. Fincorp's annual financial results for the year ended March 2025 showed a significant downturn. The company's sales for FY25 fell by 8.87% to ₹111.05 crore from ₹121.85 crore in FY24. The decline in profitability was more pronounced, with net profit falling by 81.93% to ₹11.73 crore in FY25 from a high of ₹64.92 crore in the previous financial year. This sharp drop in annual profit highlights the challenges faced during that period, which stands in stark contrast to the recovery seen in the subsequent quarters.

A Look at the Income Statement

An examination of the income statement over the past five years reveals considerable volatility. Sales grew from ₹13.99 crore in FY21 to a peak of ₹121.85 crore in FY24 before declining in FY25. Operating profit has also fluctuated, with FY24 being an outlier due to a massive ₹75.15 crore in 'Other Income', which significantly boosted the EBITDA to ₹84.62 crore and net profit to ₹64.92 crore. The subsequent normalization of other income in FY25 contributed to the sharp decline in reported profits. The company's operating profit margin (OPM) has been inconsistent, ranging from 5.07% in FY22 to 15% in FY25, with a brief dip in FY24.

Balance Sheet and Financial Health

U. Y. Fincorp maintains a solid balance sheet. As of FY25, the company's total assets stood at ₹344.84 crore. The equity capital has remained stable at ₹95.12 crore for several years, while reserves have steadily increased, reaching ₹234.54 crore in FY25. This indicates consistent retention of profits over time. The company is described as nearly debt-free, with non-current liabilities at a manageable ₹8.97 crore. A strong current ratio of 54.19 in FY25 suggests excellent short-term liquidity, although this figure has varied widely in previous years. The book value per share has shown consistent growth, rising from ₹12.72 in FY21 to ₹17.33 in FY25.

Cash Flow Analysis

The company's cash flow statement reflects a dynamic operational environment. Cash from operating activities turned positive in FY25 at ₹7.09 crore after being negative in the preceding two years. Cash from investing activities was positive at ₹5.77 crore, while cash from financing activities saw an outflow of ₹5.41 crore. The net cash flow for FY25 was a positive ₹7.45 crore, a significant improvement from the ₹0.38 crore generated in FY24.

Key Financial Ratios

Key ratios mirror the trends seen in the financial statements. The Earnings Per Share (EPS) peaked at ₹3.41 in FY24 before dropping to ₹0.62 in FY25, aligning with the net profit movement. The company has not paid any dividends, choosing to reinvest earnings back into the business, as reflected by the growing reserves. The Cash EPS for FY25 was ₹0.67, slightly higher than the basic EPS, indicating good earnings quality.

Business Operations and Market Position

U. Y. Fincorp operates as an NBFC providing a range of financial services, including inter-corporate loans, personal loans, and investments in securities. Its business model includes both fund-based services like real estate and infrastructure funding, and fee-based services such as loan syndication. The promoter holding has remained stable at 71.38% as of March 2025, suggesting strong management confidence. The company's stock has a 52-week high of ₹29.87 and a low of ₹11.16, reflecting market volatility.

Conclusion and Outlook

U. Y. Fincorp presents a tale of two different performance periods: a challenging FY25 followed by a strong recovery in the first half of FY26. While the annual results for FY25 were weak, the impressive sequential growth in revenue and profit in the June and September 2025 quarters suggests a positive turnaround. The company's strong balance sheet and near debt-free status provide a stable foundation. Investors and stakeholders will be closely watching the upcoming Q3 results on February 4, 2026, to see if this growth momentum has been sustained.