Usha Financial Services Q3 FY26: ₹19.18 Cr Revenue, ₹6.59 Cr PAT, 50.16% Financing Margin… yet stock at 0.60x Book
1. At a Glance
Usha Financial Services Ltd is that tiny NBFC that shows up at the party in a crisp suit, says “women entrepreneurs, MSME loans, EV financing,” and then quietly drops ₹6.59 Cr profit in a single quarter like it’s normal. As of 9 Feb 2026, the stock is at ₹30, market cap ₹130 Cr, and the market has still priced it at just 0.60x book value (Book Value ₹49.8). Meanwhile, recent returns are… brutal: -30.5% in 3 months and -33.3% in 6 months, basically a free demonstration of “volatility” without charging tuition fees. Latest quarter performance (Q3 ended Dec 2025) shows Revenue ₹19.18 Cr and PAT ₹6.59 Cr, with Financing Margin 50.16%. Debt sits around ₹174 Cr, Debt/Equity 0.80, ROE 8.70%, ROCE 12.4%—not bad for a small listed-on-SME lender that only recently came via IPO (listed Oct 31, 2024, IPO raise ₹98.5 Cr). Now the real question: is this a misunderstood mini-compounding machine… or just a small NBFC doing small NBFC things while the market gives it the “seen” treatment?
2. Introduction
Let’s begin like responsible financial detectives: Usha Financial Services (incorporated May 1995) is an NBFC that lends money to other NBFCs and corporates, plus MSMEs, plus individual borrowers, with a stated emphasis on women entrepreneurs. It also talks about green financing / EV and battery financing—which sounds very “future-ready” until you remember every NBFC brochure in India now has at least one electric scooter on the cover.
Operationally, the company reported AUM of ₹306 Cr (FY24) and 28,727 borrowers (FY24). In FY24, Gross NPA 3.59% and Net NPA 2.87%—not catastrophic, not pristine either. It disbursed ₹312.5 Cr in FY24, with an average ticket size noted as 2.85 (that’s how it’s stated in the dump; the unit isn’t clarified there). Yield on average term loans (gross) is 17.64%, while average cost of borrowings is 13.89% (FY24). So, yes: spreads exist, but they’re not the “print money” kind—more like “print money, then pay EMI to the bank” kind.
And just when you think it’s calm… the “Documents/Announcements” section starts behaving like a soap opera: new NCD issuance, redeeming older NCDs, CMD appointment, executive director resignation, credit rating downgrade, and gold loan product launch—all within a tight time window. So tell me—when a small NBFC is doing this much, is it “growth,” or is it “too much caffeine”?
3. Business Model – WTF Do They Even Do?
Usha’s lending menu has three broad plates:
Loans to NBFCs & Corporates They provide capital to other NBFCs for onward lending, and to corporates for working capital. This is the “B2B lending” lane—fewer borrowers, larger ticket sizes, and usually lower operational chaos than retail (unless something breaks, then it breaks loudly).
MSME Loans (small entrepreneurs, women focus) This is the classic NBFC hustle: many borrowers, higher yields, higher collections work, and naturally higher credit risk if underwriting and collections aren’t tight.
Green Financing / EV Financing This is positioned as a special focus: financing EVs and batteries. In revenue terms, it’s currently tiny: Green financing is 1% of revenue bifurcation.
Revenue mix (as provided):
Loan to NBFCs & corporates: 57.5%
MSME loans: 34%
Green financing: 1%
Processing fee: 7.5%
Product-wise NPA:
NBFC & corporate: 3.1%
MSME loans: 5.2%
So the higher-risk part is behaving like the higher-risk part. Shocking.
Geography is also interesting: revenue split shows meaningful concentration in Delhi (22.32%) and West Bengal (21.32%), then smaller slices across Maharashtra, Rajasthan, MP, TN, UP, Karnataka, Haryana, Bihar, etc. If you’re building a lender, concentration is fine until it isn’t—so it’s worth watching.
And yes, they also launched a Gold loan product on 07 Feb 2026. Because in India, when uncertainty rises, gold loans don’t ask questions; they just ask for jewellery.
4. Financials Overview
Quarterly comparison table (₹ in Crores)
Metric
Latest Quarter (Dec 2025)
Same Quarter Last Year (Dec 2024)
Previous Quarter (Sep 2025)
YoY %
QoQ %
Revenue
19.18
16.56
16.93
15.82%
13.29%
EBITDA (Proxy: Financing Profit)
9.62
6.05
5.68
59.01%
69.37%
PAT
6.59
4.55
3.98
44.84%
65.58%
EPS (₹)
1.52
1.05
0.92
44.76%
65.22%
Witty but useful take: revenue is up mid-teens, but profit jumped much faster—Financing Margin hit 50.16% in Dec 2025, up sharply vs 33.55% in Sep 2025. That’s either (a) pricing power, (b) better mix, (c) lower expenses, or (d) one quarter of unusually good behaviour. Which one is it? And how repeatable is it—because the market is clearly not convinced yet.
Before you scroll आगे: when profit rises faster than revenue in lending businesses, do you check credit costs next… or do you first suspect “one-off magic”?
5. Valuation Discussion – Fair Value Range only (Educational)
Educational range (given small-size + credit risk): 8x to 12x EV/EBITDA(proxy) Implied EV range = 30.39 × (8 to 12) = ₹243 Cr to ₹365 Cr This can be compared to current EV ₹297 Cr (already sits in the middle). So EV-based view says: not obviously cheap, not obviously expensive—it’s “priced like a cautious adult.”
