UGRO Capital Q3 Profit Jumps 23%, AUM Crosses ₹15,400 Crore

Introduction to UGRO Capital's Q3 Performance

UGRO Capital Limited, a technology-driven Non-Banking Financial Company (NBFC) specializing in MSME lending, has announced strong financial results for the third quarter and nine months ended December 31, 2025. The company reported a significant 40% year-on-year (YoY) growth in its Assets Under Management (AUM), which reached ₹15,454 crore. This growth was complemented by a 23% increase in net profit, underscoring a period of robust operational performance and strategic expansion, including the recent acquisition of Profectus Capital.

Headline Financial Numbers

The company's financial statements for Q3 FY26 reflect sustained momentum. The consolidated net profit after tax (PAT) for the quarter stood at ₹46.3 crore, a 23% increase compared to the same period in the previous fiscal year. For the nine-month period ending December 31, 2025, the PAT reached ₹123.7 crore. Total income also saw a healthy rise, growing by 32% YoY to ₹506.4 crore for the quarter. These figures indicate strong market traction and effective execution of the company's lending strategies.

Key Financial Metrics for Q3 FY26

To provide a clearer picture of the company's performance, the key financial metrics for the quarter are summarized below. The data highlights consistent growth across major indicators when compared to the corresponding quarter of the previous year.

Asset Quality and Financial Health

UGRO Capital maintained stable asset quality during the quarter. The Gross Non-Performing Assets (GNPA) stood at 2.2%, while Net Non-Performing Assets (NNPA) were at 1.4% of the total AUM. The company holds a provision coverage ratio of 45%, indicating a prudent approach to managing credit risk. Collection efficiency remained strong at 99% in Q3 FY26, an improvement from 96% in the prior year's quarter. However, the company's financial leverage increased to 3.8x from 3.1x YoY, a metric that supports AUM growth but also requires careful monitoring. The cost of borrowings remained stable at 10.24%, supported by a diversified lender base.

Strategic Growth Engines: Emerging Markets and Embedded Finance

Two key business segments have been instrumental in driving UGRO Capital's growth. The Emerging Market business now accounts for approximately 21% of the consolidated AUM, with its own AUM reaching ₹3,199 crore. This segment is supported by an expanding network of over 300 branches. Additionally, the company's Embedded Finance platform, MSL, has scaled rapidly, achieving an AUM of ₹1,798 crore within just five quarters. This platform serves over 1.85 lakh customers through strategic partnerships with major digital platforms like PhonePe and BharatPe, showcasing the success of its data-driven, technology-first approach.

Acquisition of Profectus Capital

A significant strategic development during this period was the completion of the acquisition of Profectus Capital in December 2025. Profectus Capital is now a wholly-owned subsidiary of UGRO Capital. The company has stated that its immediate focus will be on integrating the acquired platform seamlessly into its existing operations while maintaining strict portfolio discipline. This acquisition is expected to further strengthen UGRO's position in the MSME lending space and contribute to its long-term growth trajectory.

Management's Strategic Focus

Reflecting on the company's direction from the previous quarter, Shachindra Nath, Founder and Managing Director of UGRO Capital, had described the period as one of "strategic recalibration and operational steadiness." He emphasized that with the expansion of the Emerging Market network and the scaling of the Embedded Finance platform, the company is entering a phase of structural profitability improvement. The management's commentary has consistently highlighted a commitment to robust portfolio quality, high collection efficiency, and conservative provisioning, which remains evident in the Q3 FY26 results.

Conclusion and Forward Outlook

UGRO Capital's third-quarter performance demonstrates its ability to sustain high growth while maintaining stable asset quality. The 40% AUM growth and 23% rise in net profit, coupled with strategic milestones like the Profectus Capital acquisition, position the company for continued expansion. Looking ahead, the key focus will be on the successful integration of Profectus Capital and leveraging its expanded network and technological capabilities to further penetrate the MSME credit market. The company's disciplined approach to risk management and its diversified growth drivers provide a solid foundation for future performance.