Ugro Capital Limited (UGROCAP) AI Stock Analysis

• Market Cap: ₹13.53B
• Dividend Yield: N/A
• Average Volume (3M): 20.96K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 1.47
• 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: 145,240,770
• 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: 44 Neutral
• Price Target: ₹96.00 ▼(-41.96% Downside)
• Action: Reiterated Date: 03/19/26
• Date: Action: Reiterated 03/19/26

The score is held down primarily by weak financial performance (notably negative operating/free cash flow, high leverage, and a large revenue decline) and a bearish technical trend (price below key moving averages with negative MACD). Valuation is the main offset, with a moderate P/E, but it is not enough to outweigh the financial and technical risks.

Positive Factors

MSME-focused lending franchise

A focused MSME lending franchise aligns the company with a structurally large credit segment in India. Specialised underwriting, product fit and experience with MSME use-cases support durable origination capability, repeat business, and stable interest/fee income over time.

Strong reported margins

Very high gross margin and a healthy net margin reflect strong yield on advances and retained spread after costs. Sustainable margins provide buffer to absorb credit costs and support profitability as the franchise scales, enabling reinvestment and capital retention.

Diversified origination channels & partnerships

A multi-channel origination model with co-lending and partner distribution broadens reach and reduces single-channel concentration. Partnerships can lower capital intensity, accelerate sourcing, and generate fee income, supporting stable and scalable loan growth over the medium term.

Negative Factors

High financial leverage

A debt-to-equity ratio of 3.37 signals significant leverage that amplifies losses and interest burden. For an NBFC, high leverage raises refinancing and liquidity risk, limits strategic flexibility, and can increase funding costs or constrain growth if credit conditions tighten.

Weak cash generation

Persistent negative operating and free cash flows undermine the company's ability to self-fund lending growth and absorb shocks. Reliance on external funding increases vulnerability to market dislocations and stresses working capital and liquidity management over the coming quarters.

Sharp recent revenue decline

A near-50% revenue drop indicates meaningful deterioration in originations, yields or portfolio size. Loss of scale compresses net interest income and fee revenue, hurting operating leverage and making margin maintenance and return targets harder to sustain without clear recovery.

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 primarily makes money by originating MSME loans and earning interest income on the loan book (the spread between the yield on advances and its cost of borrowings). In addition to net interest income, it earns fee-based income from loan processing/origination charges and other servicing-related fees where applicable. As an NBFC, it funds lending via a mix of equity and borrowed funds (e.g., bank/NBFC borrowings, market instruments), and profitability is driven by (1) growth in assets under management/loan book, (2) maintaining healthy net interest margins, (3) managing credit costs through underwriting, collections, and portfolio diversification, and (4) operating efficiency. The company may also use co-lending/partnership-based models to originate loans with partner institutions and earn sourcing/servicing fees and/or a share of interest economics depending on structure; specific named partnerships and their contribution are null.

Ugro Capital Limited Financial Statement Overview

Summary

Overall financials are mixed-to-weak: revenue declined sharply (-48.36%) on the income statement, the balance sheet is highly leveraged (debt-to-equity 3.37) with modest ROE (7.03%), and cash flow is a key concern with negative operating and free cash flows.

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	12.87B	9.64B	7.07B	4.88B	2.68B	1.33B
Gross Profit	3.34B	1.29B	995.24M	678.77M	624.11M	492.22M
EBITDA	3.83B	2.62B	2.19B	1.07B	348.23M	257.76M
Net Income	1.55B	1.44B	1.19B	397.76M	145.51M	287.27M
Balance Sheet
Total Assets	107.79B	91.68B	62.80B	43.06B	28.54B	17.51B
Cash, Cash Equivalents and Short-Term Investments	15.99B	5.53B	883.64M	2.12B	1.60B	3.53B
Total Debt	80.88B	69.04B	46.53B	31.49B	18.31B	7.88B
Total Liabilities	83.16B	71.22B	48.42B	33.22B	18.88B	7.98B
Stockholders Equity	24.63B	20.46B	14.38B	9.84B	9.67B	9.52B
Cash Flow
Free Cash Flow	-669.50M	-25.00B	-15.38B	-12.61B	-11.46B	-3.59B
Operating Cash Flow	-556.27M	-24.74B	-15.35B	-12.20B	-11.32B	-3.47B
Investing Cash Flow	-3.88B	-799.24M	-2.30B	-845.42M	413.80M	-459.17M
Financing Cash Flow	15.07B	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: Negative
• RSI: Neutral
• STOCH: Neutral

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 104.72, above the 50-day MA of 131.42, and above the 200-day MA of 163.89, indicating a bearish trend. The MACD of -11.86 indicates Negative momentum. The RSI at 32.04 is Neutral, neither overbought nor oversold. The STOCH value of 37.38 is Neutral, 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	₹30.10B	23.71	―	0.92%	5.73%	12.29%
BFINVEST	62 Neutral	₹13.97B	4.34	―	―	―	―
ARMANFIN	61 Neutral	₹15.86B	18.43	―	―	-6.03%	-100.77%
MUTHOOTMF	51 Neutral	₹25.69B	19.28	―	―	-10.17%	-181.71%
SPANDANA	48 Neutral	₹18.39B	-5.67	―	―	-45.13%	-1646.01%
UGROCAP	44 Neutral	₹13.53B	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.