UGRO Capital Q2 FY26: AUM ₹12,226 Cr, income +35%

Results snapshot: growth with stable risk metrics

UGRO Capital reported its financial results for the quarter and half year ended 30 September 2025, highlighting steady growth in assets and profitability. Assets Under Management (AUM) stood at ₹12,226 crore, up 20% year-on-year. Total income grew faster than AUM, rising 35% YoY to ₹461 crore in Q2 FY26 and 37% YoY to ₹883 crore in H1 FY26. Profit after tax (PAT) came in at ₹43.3 crore for Q2 FY26, up 27% quarter-on-quarter and 22% year-on-year. For H1 FY26, PAT was ₹77.4 crore, up 18% YoY. The update also stressed portfolio stability, with Stage-1 assets at 93% of AUM.

AUM expansion and disbursement pace in FY26 so far

The company reported net disbursements of ₹1,789 crore in Q2 FY26, taking H1 FY26 net disbursement to ₹3,388 crore. These figures provide a direct view of origination momentum across the first half of FY26. The AUM growth and disbursement run-rate matter because they feed into future interest income and fee streams, while also testing underwriting quality. UGRO Capital also disclosed that off-book AUM accounts for 43% of AUM. Off-book scale is tied to co-lending and fintech partnerships, which can diversify funding and reduce on-balance-sheet risk intensity. The company said this off-book book is spread across 16 co-lending and 40 fintech partnerships.

Income and profitability: Q2 and H1 numbers

Total income for Q2 FY26 was ₹461 crore, up 35% YoY. For H1 FY26, total income was ₹883 crore, up 37% YoY. PAT for Q2 FY26 was ₹43.3 crore, with growth of 27% QoQ and 22% YoY, while H1 FY26 PAT rose 18% YoY to ₹77.4 crore. The company did not provide additional line items in the Q2 FY26 summary beyond these totals, so operating leverage and cost trends cannot be quantified from the provided data alone. Still, the pace of income growth relative to AUM indicates improved monetisation or mix, given that income rose faster than AUM on a YoY basis in this period.

Asset quality: GNPA, NNPA, and provisioning coverage

UGRO Capital reported GNPA of 2.4% and NNPA of 1.5% on AUM, alongside a provision coverage ratio of 47%. Stage-1 assets were stable at 93% of AUM, which the company flagged as an indicator of high asset quality. These metrics are closely tracked for MSME-focused lenders because portfolio seasoning and macro sensitivity can influence delinquencies. The small difference between GNPA and NNPA reflects provisioning and recoveries, but the article data does not provide movement across quarters for these ratios. Still, the disclosures point to a stable risk profile alongside growth.

Capital position: CRAR provides headroom

The company reported a CRAR of 25.4%, describing it as strong capital headroom. This is a key buffer for lenders scaling disbursements, as faster growth consumes capital and can influence funding costs. The data provided does not include tier-wise capital ratios, but the reported CRAR is well above regulatory minimums for NBFCs.

Rating actions: watch status signals a transition phase

UGRO Capital disclosed two rating updates. India Ratings revised its long-term ratings to IND A with Rating Watch and Positive Implication. Crisil updated its long-term ratings to Crisil A with Rating Watch and Developing Implications. Rating watch actions are significant for NBFCs because they can affect borrowing costs and lender appetite even before an actual upgrade or downgrade is finalised.

Partnerships and off-book mix: co-lending and fintech rails

Off-book AUM was disclosed at 43% of total AUM, supported by 16 co-lending partnerships and 40 fintech partnerships. Such structures can help scale origination while sharing credit exposure with partners, depending on the specific arrangements. The company also previously highlighted embedded finance scale, with embedded finance AUM crossing ₹1,000 crore (₹1,011 crore AUM cited) and ₹582 crore disbursed in Q1 FY26 through the MSL platform. While Q2 embedded finance numbers were not provided in the Q2 FY26 summary, the earlier Q1 disclosure offers context on how partnership-led distribution is contributing to overall AUM.

Strategic actions in the background: acquisition and equity raise

Separately, the company had disclosed progress on an all-cash acquisition of Profectus Capital valued at ₹1,400 crore, with shareholder approval received and change-of-control and allied approvals in process. It also stated that a ₹381 crore rights issue was completed and a ₹911 crore preferential issue was in progress. These actions were positioned as strengthening the balance sheet for quality growth.

Key numbers table

What investors will track next

From the disclosed data, the immediate monitorables are (1) whether disbursement momentum sustains into the second half, (2) whether GNPA and NNPA remain range-bound as the book scales, and (3) how funding conditions evolve given the rating watch updates. Separately, the timeline for pending approvals related to the Profectus Capital acquisition and the completion of the preferential issue will remain key corporate milestones, based on the company’s earlier disclosures.