UGRO Capital Limited, the DataTech-driven non-banking financial company (NBFC) focused on MSME lending, unveiled its financial results for the quarter and fiscal year ended 31 March 2025, highlighting its strongest performance to date. With loan originations hitting an all-time high and assets under management (AUM) expanding significantly, UGRO Capital’s FY25 numbers showcased robust growth driven by its technology-led underwriting model, branch expansion, and embedded finance initiatives.
The Mumbai-based NBFC reported that AUM stood at ₹12,003 crore as of March 2025, registering a 33% year-on-year increase. Simultaneously, UGRO Capital’s disbursements for the full year reached ₹7,651 crore, reflecting a 30% rise compared to FY24. For the fourth quarter alone, the company reported loan disbursements of ₹2,436 crore, a sharp 57% surge year-on-year and a sequential growth of 16% quarter-on-quarter. This milestone underscored UGRO Capital’s accelerating momentum in India’s highly competitive MSME lending segment.
How Did UGRO Capital Perform Financially in FY25?
UGRO Capital reported a total income of ₹1,442 crore for FY25, representing a 33% year-on-year growth compared to ₹1,082 crore in the previous fiscal year. Net Total Income also advanced to ₹814 crore during the year, reflecting a 27% rise over FY24. The company’s operating expenses mirrored the business expansion, growing by 27% year-on-year to ₹438 crore.
Profit After Tax (PAT) for FY25 rose 21% year-on-year, reaching ₹144 crore, while Q4FY25 PAT stood at ₹41 crore, recording an 8% quarter-on-quarter improvement and a 24% increase compared to the same quarter last year. The robust profitability metrics were driven by UGRO Capital’s strong origination growth, improved yield profiles, and effective risk controls.
On the liability side, UGRO Capital mobilized its highest-ever quarterly debt of over ₹1,500 crore during Q4FY25. As of 31 March 2025, its total outstanding debt stood at ₹6,904 crore, supporting its ambitious disbursement goals while maintaining a healthy balance sheet.
What Drove UGRO Capital’s Record Loan Disbursements?
A key factor propelling UGRO Capital’s record disbursements in FY25 was its focus on the Emerging Market segment, particularly through its Loan Against Property (LAP) products. Disbursements under the Emerging Market LAP business reached ₹669 crore in Q4FY25, representing a dramatic 230% growth over the corresponding quarter in FY24 and a sequential increase of 23% from Q3FY25. The successful scale-up of this business was supported by the opening of 85 new branches during FY25, substantially enhancing UGRO’s geographical reach into previously underserved MSME markets.
UGRO Capital’s co-lending model also contributed meaningfully to disbursement growth. The company’s off-balance sheet assets, driven through partnerships with 17 co-lending partners, now represent 42% of its total AUM. Embedded finance initiatives under the MSL platform surpassed an AUM of ₹743 crore, reaffirming UGRO’s success in integrating data-driven financial services across multiple distribution channels.
How Strong Was UGRO Capital’s Asset Quality and Risk Management in FY25?
Despite its aggressive growth trajectory, UGRO Capital maintained a disciplined risk framework. The company’s gross non-performing assets (GNPA) and net non-performing assets (NNPA) stood at 2.3% and 1.6% respectively as of March 2025. This strong asset quality performance highlights the effectiveness of UGRO’s data-driven underwriting and collection mechanisms, which continue to differentiate it from many traditional NBFCs operating in the MSME lending space.
Credit costs rose during the year, standing at ₹173 crore for FY25 compared to ₹116 crore in FY24, reflecting the larger loan book. However, the company’s collection efficiency, as indicated in management commentary, remained industry-leading throughout the year.
Why Is UGRO Capital’s DataTech Model a Competitive Advantage?
UGRO Capital’s DataTech lending platform, anchored by proprietary technology modules such as GRO Score (3.0) and GRO Xstream, continued to deliver competitive advantages across sourcing, underwriting, and collections. The GRO Score system, which applies AI and machine learning algorithms to risk-rank customers, enables faster and more accurate credit assessments, especially for MSMEs historically underserved by traditional banking channels.
The company’s other technology platforms—GRO Plus for intermediated sourcing, GRO Chain for supply chain finance, and GRO X for embedded MSME financing—have allowed UGRO Capital to scale its business efficiently while maintaining operational discipline.
This unique technological foundation positions UGRO Capital favourably to continue scaling its market share, as the NBFC seeks to bridge India’s large and still largely unsolved small business credit gap.
What Are the Strategic Goals for UGRO Capital Moving Forward?
UGRO Capital’s management, led by Founder and Managing Director Shachindra Nath, reiterated its ambition to capture a 1% market share of India’s MSME lending sector over the next three years. Nath emphasised that the company’s FY25 performance validated its DataTech-driven strategy and the scalability of its model.
The focus in FY26 will remain on deepening penetration into Emerging Markets, expanding co-lending and embedded finance platforms, strengthening liability diversification, and further enhancing risk management practices. Backed by fresh equity infusions totalling over ₹1,265 crore in 2024, UGRO Capital is well-capitalized to pursue aggressive growth targets without compromising asset quality.
As the MSME credit environment in India becomes increasingly competitive, UGRO’s emphasis on technological innovation, strong partnerships, and risk-calibrated expansion is expected to offer a durable advantage.
What Does the Latest Market Sentiment Say About UGRO Capital?
Despite UGRO Capital’s strong operational performance in FY25, the stock has recently faced volatility. As of April 25, 2025, UGRO Capital’s shares closed at ₹185.26, marking a 4.54% decline compared to the previous day. While the stock appreciated approximately 6.72% over the past month, it has seen a 11.67% decline over the past three months, reflecting broader market pressures and profit-booking tendencies.
The stock trades at an attractive Price-to-Earnings (P/E) ratio of 13.29 and a Price-to-Book (P/B) ratio of 0.92, suggesting a valuation disconnect relative to its strong growth trajectory. Analysts maintain a “Strong Buy” recommendation with an average price target of ₹274.67, implying a potential upside of over 48%. Some optimistic forecasts peg the stock’s upper target closer to ₹320, underscoring bullish medium-term expectations.
How Are Institutions Positioning Themselves in UGRO Capital?
Institutional participation in UGRO Capital has strengthened over recent quarters. Foreign Institutional Investors (FIIs) increased their holdings from 24.7% to 27.25% during the March 2025 quarter, signalling renewed overseas interest in India’s high-growth MSME lending segment. Conversely, Domestic Institutional Investors (DIIs) slightly trimmed their exposure from 2.4% to 1.9%, a movement seen as tactical portfolio balancing rather than fundamental concerns.
The combined institutional holding rose from 27.10% to 29.10%, a clear vote of confidence from long-term investors, particularly those with exposure to financial innovation and emerging lending models.
Should Investors Buy, Sell or Hold UGRO Capital Shares?
Given UGRO Capital’s strong financials, expanding AUM, resilient asset quality, and low valuations, analysts generally view the stock as an attractive Buy for medium- to long-term investors. The company’s leadership in technology-driven MSME lending, combined with an improving funding mix and sector tailwinds, further strengthens the investment case.
However, technical indicators suggest caution in the very short term, with support levels recently tested near ₹168.26. For investors seeking to initiate or add to positions, staggered buying approaches around current levels may offer a prudent entry strategy.
Ultimately, UGRO Capital’s commitment to financial inclusion, data-driven risk models, and strategic scalability offers a compelling narrative for those seeking exposure to India’s MSME growth story.
How UGRO Capital Is Positioned to Shape the Future of MSME Lending
UGRO Capital’s FY25 results underscore a pivotal year in the company’s journey to reshape MSME financing in India. With lifetime-high quarterly originations, a 33% expansion in AUM, robust asset quality metrics, and technology-led scalability, UGRO has laid a strong foundation for sustainable long-term growth.
By prioritising data-driven decision-making, strategic co-lending alliances, and deeper geographic expansion, UGRO Capital is carving a unique position among India’s new-generation NBFCs. As it enters FY26, the company appears poised to consolidate its gains further and potentially emerge as one of India’s leading small business financiers.
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