Ugro Capital Limited (UGROCAP) AI Stock Analysis

• Market Cap: ₹14.92B
• Dividend Yield: N/A
• Average Volume (3M): 20.96K
• Price to Earnings (P/E): 13.5
• 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: 142,989,440
• 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): 13.6
• Revenue Forecast (FY): ₹13.82B

• Rating: 45 Neutral
• Price Target: ₹103.00 ▼(-37.73% 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

SME-focused lending model

Ugro's core business concentrates on SME lending and a suite of products (term loans, working capital) addressing persistent financing gaps in India. That focused model targets a structurally large, underserved market, supporting durable loan demand and repeat customer relationships over multiple cycles.

Data-driven underwriting

A data-driven credit assessment framework improves risk selection, pricing precision and scalability in origination. Over 2-6 months, stronger analytics can reduce default volatility, lower loss rates, and enable faster portfolio growth through fintech partnerships and automated decisioning.

High reported margins

Reported gross and net margins indicate strong revenue retention on lending operations and an ability to generate profitable spreads after costs. Sustainable margins provide buffer to absorb credit costs and support reinvestment or provisioning, strengthening long-term earnings resilience.

Negative Factors

High leverage

A debt-to-equity of 3.37 implies heavy reliance on borrowed funds, reducing financial flexibility. In a rising-rate or stress environment, elevated leverage amplifies solvency and refinancing risk, constraining capacity to grow the book or absorb higher credit costs over the medium term.

Weak cash generation

Negative operating and free cash flows signal that accounting profitability may not be translating into cash. This undermines internal funding for loan growth, increases dependence on external financing, and raises concerns about the quality of earnings and liquidity over the coming quarters.

Sharp revenue decline

A near 50% revenue drop indicates material deterioration in origination, collections or customer access. Such a structural decline can degrade scale economics, reduce fee and interest income consistency, and pressure margins and provisioning needs unless growth drivers are restored.

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 122.76, above the 50-day MA of 145.86, and below the 200-day MA of 167.57, indicating a bearish trend. The MACD of -11.89 indicates Positive momentum. The RSI at 22.39 is Positive, neither overbought nor oversold. The STOCH value of 14.55 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	₹30.97B	23.71	―	0.92%	5.73%	12.29%
BFINVEST	62 Neutral	₹14.48B	4.34	―	―	―	―
ARMANFIN	61 Neutral	₹14.56B	18.43	―	―	-6.03%	-100.77%
MUTHOOTMF	51 Neutral	₹27.00B	-9.86	―	―	-10.17%	-181.71%
SPANDANA	48 Neutral	₹20.87B	-5.67	―	―	-45.13%	-1646.01%
UGROCAP	45 Neutral	₹14.92B	13.46	―	―	33.99%	11.65%

Ugro Capital Limited Corporate Events

UGRO Capital Restructures MyShubhLife Deal to All-Cash Payout as Acquisition Nears Close

UGRO Capital has moved to close its acquisition of Datasigns Technologies, operator of the MyShubhLife platform, which it has already been using for 15 months to originate MSME and small merchant loans with assets under management of about ₹1,720 crore and stable asset quality. The deal strengthens UGRO’s embedded finance and digital ecosystem strategy by fully integrating a platform that underpins its partnership-led lending model.

To complete the transaction, UGRO and the selling shareholders signed an amended and restated share purchase agreement that revises both the mode and size of consideration. Instead of the earlier plan for a ₹45 crore mix of cash and share swap in two tranches, UGRO will pay ₹38.23 crore entirely in cash in a single tranche, a change aimed at optimizing capital allocation and avoiding equity dilution as Datasigns becomes a wholly owned subsidiary upon completion of closing formalities.

UGRO Capital Secures RBI Nod for Amalgamation of Profectus Capital

UGRO Capital has received a conditional ‘No Objection’ from the Reserve Bank of India for the proposed amalgamation of its wholly owned subsidiary, Profectus Capital Private Limited, into the parent company. The move is part of a larger restructuring that could streamline operations and consolidate the group’s lending platform.

The lender has also sought observation letters from the stock exchanges under SEBI’s listing regulations, with the scheme still requiring approvals from the National Company Law Tribunal, other regulators, and stakeholders. If cleared, the amalgamation is expected to simplify the corporate structure and may enhance regulatory efficiency and capital deployment for the combined entity.

UGRO Capital Raises Rs. 50 Crore via Short-Term Unlisted Commercial Papers

UGRO Capital Limited has approved and completed the allotment of unlisted commercial papers amounting to Rs. 50 crore, with a face value of Rs. 5 lakh per instrument and an aggregate issue value of approximately Rs. 49.42 crore. The commercial papers, carrying a tenure of 49 days from 25 February 2026 to 15 April 2026 and arranged with Yes Bank Limited as the issuing and paying agent, provide short-term funding that can support the company’s liquidity and near-term operational requirements without immediate equity dilution.

The issuance of these unlisted commercial papers reflects UGRO Capital’s continued reliance on money market instruments for working capital and liability management. By locking in a defined redemption amount of Rs. 50 crore at maturity, the company signals a structured approach to short-term borrowing that may help optimise its cost of funds, maintain financial flexibility, and potentially strengthen its funding profile in the competitive non-banking financial space.

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.