Ugro Capital Limited (UGROCAP) AI Stock Analysis

• Market Cap: ₹15.36B
• Dividend Yield: N/A
• Average Volume (3M): 20.96K
• Price to Earnings (P/E): 7.4
• Beta (1Y): 1.40
• Revenue Growth: 33.99%
• EPS Growth: 11.65%
• Country: IN
• Employees: 1,678
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 3.25
• Shares Outstanding: 139,857,830
• 10 Day Avg. Volume: 15,127
• 30 Day Avg. Volume: 20,963
• PEG Ratio: 0.67
• Price to Book (P/B): 0.81
• Price to Sales (P/S): 1.72
• P/FCF Ratio: -0.66
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 14.12
• Revenue Forecast (FY): ₹12.82B

• Rating: 45 Neutral
• Price Target: ₹120.00 ▼(-27.45% Downside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is held down primarily by weak financial quality (negative operating/free cash flows), a leveraged balance sheet (debt-to-equity 3.37), and a sharp revenue decline (-48.36%). Technicals are also bearish with the price below key moving averages and negative MACD, despite oversold RSI/Stoch. Valuation is a partial offset with a low P/E (8.28).

Positive Factors

Data-driven underwriting

Ugro's use of technology and data analytics for credit assessment is a durable advantage: it supports faster, scalable underwriting, improves borrower screening and pricing accuracy, and can reduce default losses and operating costs over the medium term as data models improve.

SME-focused business model

A dedicated SME lending focus targets a structurally underbanked segment in India. Tailored products and diversified SME exposures create sustained demand, cross-sell opportunities and market niche defensibility, supporting steady loan flows and growth over 2-6 months if origination stabilizes.

High reported gross and decent net margins

Reported high gross margin and moderate net margin indicate strong revenue retention and pricing power within lending operations. These margins provide a buffer against credit costs and support profitability sustainability if loan volumes recover or credit performance normalizes.

Negative Factors

High financial leverage

A debt-to-equity ratio of 3.37 signals significant leverage, which raises refinancing and interest-rate sensitivity risks. For a lending franchise, elevated leverage constrains capital flexibility, increases funding cost vulnerability, and limits capacity to absorb credit shocks over the medium term.

Weak cash generation

Negative operating and free cash flows are a structural concern for a finance company: they impair the ability to self-fund loan growth, meet debt obligations, and invest in risk systems. Reliance on external funding increases funding-risk and can pressure margins and capital ratios.

Sharp recent revenue decline

A near-50% revenue decline suggests material origination slowdowns, asset run-off or collection issues. Reduced scale raises unit costs, hinders leverage of fixed operating expenses, and may reflect broader demand or execution challenges that weaken medium-term earnings prospects.

Ugro Capital Limited Business Overview & Revenue Model

Company Description

UGRO Capital Limited, a non-banking financial company, engages in the lending business. It provides business loans to healthcare, education, chemicals, food processing/FMCG, hospitality, electrical equipment and components, auto components, and light engineering sectors. The company was formerly known as Chokhani Securities Limited and changed its name to Ugro Capital Limited in September 2018. UGRO Capital Limited was incorporated in 1993 and is based in Mumbai, India.

How the Company Makes Money

Ugro Capital generates revenue primarily through interest income earned on the loans it disburses to SMEs. The company's revenue model is based on a combination of interest rates charged on loans, processing fees, and other service fees associated with its lending products. Key revenue streams include the issuance of term loans and working capital loans, where Ugro Capital typically charges a competitive interest rate that reflects the risk profile of the borrower. Additionally, the company may earn income from partnerships with fintech platforms and other financial institutions that facilitate loan origination and customer acquisition. Factors contributing to Ugro Capital's earnings include its data-driven approach to credit assessment, which allows for efficient risk management and competitive pricing, as well as a growing market demand for SME financing solutions in India.

Ugro Capital Limited Financial Statement Overview

Summary

Mixed fundamentals: strong reported gross margin and moderate net margin, but revenue declined sharply (-48.36%). Balance sheet leverage is high (debt-to-equity 3.37) with modest ROE (7.03%). Cash flow is the biggest कमजोरी with negative operating and free cash flows, raising liquidity/quality-of-earnings concerns.

Income Statement

Ugro Capital Limited's income statement shows a mixed performance. The company has a high gross profit margin of 100% in the latest year, indicating strong revenue retention. However, the net profit margin is moderate at 22.45%, and the EBIT and EBITDA margins are unusually high due to the nature of financial services, which may not accurately reflect operational efficiency. The revenue growth rate is concerning, with a significant decline of 48.36% in the latest year, indicating potential challenges in revenue generation.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 3.37, suggesting significant leverage and potential financial risk. Return on equity is relatively low at 7.03%, indicating modest profitability relative to shareholder equity. The equity ratio stands at 22.32%, showing a moderate level of equity financing compared to total assets. Overall, the balance sheet indicates a leveraged position with moderate returns.

Cash Flow

Cash flow analysis highlights significant challenges, with negative operating and free cash flows. The free cash flow growth rate is negative, indicating deteriorating cash generation capabilities. The operating cash flow to net income ratio is negative, suggesting cash flow issues relative to reported earnings. The free cash flow to net income ratio is slightly above 1, indicating that free cash flow is just covering net income, but the overall cash flow position is weak.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.45B	9.64B	7.07B	4.88B	2.68B	1.33B
Gross Profit	1.34B	1.29B	995.24M	678.77M	624.11M	492.22M
EBITDA	2.46B	2.62B	2.19B	1.07B	348.23M	257.76M
Net Income	1.48B	1.44B	1.19B	397.76M	145.51M	287.27M
Balance Sheet
Total Assets	0.00	91.68B	62.80B	43.06B	28.54B	17.51B
Cash, Cash Equivalents and Short-Term Investments	0.00	5.53B	883.64M	2.12B	1.60B	3.53B
Total Debt	0.00	69.04B	46.53B	31.49B	18.31B	7.88B
Total Liabilities	-20.46B	71.22B	48.42B	33.22B	18.88B	7.98B
Stockholders Equity	20.46B	20.46B	14.38B	9.84B	9.67B	9.52B
Cash Flow
Free Cash Flow	0.00	-25.00B	-15.38B	-12.61B	-11.46B	-3.59B
Operating Cash Flow	0.00	-24.74B	-15.35B	-12.20B	-11.32B	-3.47B
Investing Cash Flow	0.00	-799.24M	-2.30B	-845.42M	413.80M	-459.17M
Financing Cash Flow	0.00	26.55B	18.14B	12.79B	10.23B	5.08B

Ugro Capital Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 165.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:UGROCAP, the sentiment is Negative. The current price of 165.4 is above the 20-day moving average (MA) of 132.61, above the 50-day MA of 150.60, and below the 200-day MA of 168.95, indicating a bearish trend. The MACD of -10.89 indicates Positive momentum. The RSI at 22.17 is Positive, neither overbought nor oversold. The STOCH value of 9.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:UGROCAP.

Ugro Capital Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
TFCILTD	66 Neutral	₹32.88B	27.03	―	0.92%	5.73%	12.29%
BFINVEST	62 Neutral	₹15.17B	9.22	―	―	―	―
ARMANFIN	60 Neutral	₹16.49B	58.14	―	―	-6.03%	-100.77%
MUTHOOTMF	51 Neutral	₹28.73B	-9.55	―	―	-10.17%	-181.71%
SPANDANA	48 Neutral	₹22.46B	-1.68	―	―	-45.13%	-1646.01%
UGROCAP	45 Neutral	₹15.36B	7.45	―	―	33.99%	11.65%

Ugro Capital Limited Corporate Events

UGRO Capital Releases Revised Q3 FY26 Investor Presentation on MSME Lending Business

UGRO Capital Limited has released a revised investor presentation covering the quarter and nine months ended 31 December 2025, in line with its disclosure obligations to stock exchanges. The updated presentation, made available to investors via the company’s website and exchanges, is aimed at providing refreshed financial and business performance details for Q3 FY26 and underscores the firm’s ongoing efforts to communicate transparently with stakeholders as it builds its MSME-focused lending franchise.

UGRO Capital Releases Revised Investor Presentation for Q3 and Nine Months FY26

UGRO Capital Limited has released a revised investor presentation for the quarter and nine months ended 31 December 2025, in line with disclosure requirements under SEBI’s Listing Obligations and Disclosure Requirements Regulations. The updated presentation, which is now available on the company’s website, is intended to provide investors and stakeholders with refreshed financial and operational information for Q3 FY26, underscoring the company’s ongoing efforts to maintain transparency and engagement with the market.

UGRO Capital Realigns MSME Lending Business to Boost Earnings Quality and Cut Costs

UGRO Capital has announced a strategic realignment of its business model aimed at improving earnings quality, operating efficiency and long-term capital sustainability, by shifting focus toward two core segments: emerging market secured lending through its branch network and embedded merchant financing via digital platforms and partnerships. The company will progressively reduce exposure to intermediated, DSA-led and lower-yield origination channels, allow non-core portfolios to run down, and implement structural cost rationalisation measures—including exiting DSA-led verticals and optimising corporate and technology overheads—targeting annualised operating cost savings of about ₹220 crore, which is expected to enhance recurring interest income, strengthen operating leverage and capital efficiency, and support a more predictable, annuity-led MSME lending franchise funded largely through internal accruals while preserving healthy capital adequacy.

UGRO Capital Clears Q3 Results, Board Changes and Insider Trading Code Update

UGRO Capital’s board, at its meeting on 7 February 2026, approved the unaudited standalone and consolidated financial results for the quarter and nine months ended 31 December 2025, along with the statutory auditors’ limited review report, and cleared a postal ballot notice to appoint ClearSky nominee Ramanathan Subramanian Arun Kumar as a non-executive nominee director. The board also amended the company’s code of conduct for prohibition of insider trading, noted the resignation of Samena nominee director Chetan Gupta due to additional professional commitments, and announced reopening of the trading window from 10 February 2026, signalling active governance changes and ongoing alignment of board composition with key shareholders’ rights.

UGRO Capital Re-opens ₹100-Crore Non-Convertible Debenture Issue

UGRO Capital has announced that it will re-open the issuance of its Series 2 Non-Convertible Debentures (NCDs) aggregating to INR 100 crore, after having previously withdrawn the proposed issue on 22 December 2025. The decision to revive this debt issuance indicates the company’s intent to tap the bond market for funding, which could support its lending operations and balance sheet growth, and is relevant for investors tracking its capital-raising plans and overall funding strategy.

UGRO Capital Increases Equity through CCD Conversion, Enhances Transparency

UGRO Capital Limited has announced the conversion of Compulsorily Convertible Debentures (CCDs) issued in June 2024 into equity shares, resulting in an increase in its equity share capital to Rs. 1,54,70,67,530. This move reflects the completion of capital-raising efforts designed to strengthen the company’s financial position, although the company also highlighted the lapse of certain warrants due to non-conversion, emphasizing transparency and compliance in its financial reporting process.

UGRO Capital Allots EUR 10 Million in Bonds to Boost Financial Flexibility

UGRO Capital Limited has announced the allotment of senior, unsecured, EUR-denominated non-convertible redeemable bonds through a private placement. The issuance, totaling EUR 10 million, is set to mature in December 2030 and will carry an annual interest rate of 6%. This move is expected to enhance the company’s financial flexibility and strengthen its position in the capital markets.

Ugro Capital Expands Equity Base Through CCD Conversion

Ugro Capital Limited has announced the allotment of 15,89,170 equity shares following the conversion of Compulsorily Convertible Debentures (CCDs), as part of a capital raise amounting to INR 534.64 crores. This conversion increases the company’s equity share capital, reflecting a strategic move to bolster its financial position and enhance shareholder value.

Ugro Capital to Raise Funds via Non-Convertible Debentures

Ugro Capital Limited has announced its intention to raise funds by issuing Non-Convertible Debentures (NCDs) through a private placement. This strategic move, pending approval from the Investment and Borrowing Committee, is aimed at enhancing the company’s financial capabilities and strengthening its market position, potentially impacting stakeholders by increasing the company’s investment capacity.

Ugro Capital Converts Debentures to Equity Shares, Expands Capital Base

Ugro Capital Limited has announced the conversion of its compulsorily convertible debentures (CCDs) into equity shares, following the expiration of the 18-month tenure of the CCDs issued in June 2024. This conversion has resulted in the issuance of 7,342,732 new equity shares, increasing the company’s total equity share capital. The conversion aligns with the company’s strategic capital raise plan, while the unexercised warrants from the same issuance have lapsed, impacting the company’s financial structuring and market positioning.

UGRO Capital Converts Debentures to Equity Shares, Boosting Capital

UGRO Capital Limited has announced the conversion of its Compulsorily Convertible Debentures (CCDs) into equity shares, following the expiration of their 18-month tenure. This conversion increases the company’s equity share capital, reflecting a strategic move to strengthen its financial structure and market position. The conversion of 7,342,732 equity shares will align with existing shares, while unexercised warrants will lapse, impacting the company’s capital dynamics.