U GRO Capital Q2 FY26 – ₹12,226 Cr AUM, ₹77 Cr H1 PAT, ₹3,000 Cr Profectus Play: When FinTech Meets NBFC and Decides to Cosplay as a Data Scientist
1. At a Glance
There’s fintech. There’s NBFC. And then there’s U GRO Capital — a company that looked at both and said, “Why not be both, but with a PhD in Excel formulas?”
As of Q2 FY26, U GRO Capital flaunts an AUM of ₹12,226 crore, a half-year PAT of ₹77.4 crore, and a brand-new toy in its cart — the ₹3,000 crore acquisition of Profectus Capital. Because apparently, growing 35% annually wasn’t enough; they wanted to grow horizontally too.
The stock sits at ₹177, giving it a market cap of ₹2,475 crore, a P/E of 15.9x, and a Price-to-Book of 0.84x — a discount so deep, even DMart would blush. But let’s not get too excited; the ROE is a modest 8.26% and ROCE at 11%, because scaling fintech dreams costs real money.
Over the last quarter, revenue jumped 37.9% YoY to ₹455 crore, while PAT grew 21.9% to ₹43.3 crore. The company’s GNPA remains controlled at ~2%, proving that while MSMEs may default on sleep, they’re mostly paying their EMIs.
So, is U GRO a sleeping fintech beast or just another NBFC dressed in data science jargon? Grab your GRO Score 3.0 (AI/ML-powered, obviously), and let’s investigate.
2. Introduction
Remember when lending used to be about knowing your borrower, visiting their shop, and smelling the sweat on their factory floor? U GRO Capital replaced all that with machine learning, dashboards, and an app that probably has more data points than your Tinder profile.
Founded with a dream to bridge India’s MSME credit gap, U GRO Capital believes that data is the new collateral. Their pitch: small businesses deserve smarter credit. Their problem: every other NBFC in India thinks the same thing.
Still, they’ve pulled off a commendable hustle — a 5-year CAGR of 68% in sales and 49% in profits. AUM grew from ₹6,000 crore in FY23 to ₹9,000 crore in FY24, and now ₹12,226 crore in FY26. That’s the kind of compounding even your SIPs envy.
But the road isn’t without bumps. With only 2.25% promoter holding (Poshika Advisory LLP and Shachindra Nath), the company feels more like a venture-backed startup than an old-school NBFC. Meanwhile, FIIs hold nearly 29%, which means the “smart money” is watching — though sometimes, smart money can be very patient before panicking.
And yes, the name U GRO sounds like motivational advice — but make no mistake, they’ve actually been growing at fintech speed while sweating under NBFC regulations.
3. Business Model – WTF Do They Even Do?
U GRO Capital is not your average lender handing out cash from behind a mahogany desk. It calls itself a “DataTech Lending Platform”, which in normal English means: “We use a lot of data and buzzwords to lend money.”
They target eight key sectors — Micro Enterprises, Light Engineering, Electrical Equipment, Food Processing, Auto Components, and a few “Others” (because every Excel sheet needs a miscellaneous column).
Their products are split like a well-balanced thali:
Secured Business Loans (23%) – the paneer tikka of the menu, safe and solid.
Unsecured Business Loans (23%) – spicy, risky, but fun.
Micro Enterprise Loans (13%) – the startup snacks.
Machinery Loans (13%) – the steel-and-sweat segment.
Partnership & Alliances (12%), Supply Chain Financing (7%), and Others (9%) — the garnish of fintech innovation.
Their secret sauce is the GRO ecosystem:
GRO Plus for intermediated sourcing,
GRO Chain for automated supply chain finance,
GRO Xstream for co-lending,
GRO X for embedded finance,
and the grand finale: GRO Score 3.0, a credit algorithm powered by AI/ML. (Because no one trusts Excel formulas anymore unless they’re machine-learned.)
With 127 micro branches, 23 prime branches, and 500+ GRO partners, they’ve spread like samosa stalls — visible in Tamil Nadu (17%), Rajasthan (16%), and Gujarat (10%).
So technically, Screener’s 15.9x is a bit high — maybe they didn’t use the GRO Score calculator.
Commentary: Revenue up, profit up, NPAs steady — the holy trinity of a disciplined NBFC. The only missing thing? A dividend. But maybe that’s the price of being a “tech-led” lender — every rupee must go back into growth, or at least PowerPoint presentations.
5. Valuation Discussion – Fair Value Range Only
Let’s pull out our calculators — or better yet, our GRO Score 3.0 — and try to value this data-loving lender.
a) P/E Method: EPS (FY26E annualized): ₹14.8 Assign sector range: 14x–20x (since peers like Shriram Finance trade ~17x). → Fair Value = ₹207–₹296
b) EV/EBITDA Method: EV = ₹8,964 Cr; EBITDA (FY26E) ≈ ₹1,046 Cr (annualized) → EV/EBITDA = 8.6x currently Peers like Chola and Shriram trade between 9x–12x → Fair Value Range = ₹180–₹250
c) Simplified DCF (Educational): Assume PAT growth of 18%, cost of equity 13%, terminal growth 4%. DCF suggests intrinsic value near ₹210–₹240.
Fair Value Range: ₹180–₹260 (educational only)
Disclaimer: This fair value range is for educational purposes only and is not investment advice. Don’t mortgage your house based on this paragraph.
6. What’s Cooking – News, Triggers, Drama
Oh boy, U GRO has been busy. Like a startup that just discovered caffeine.
Profectus Capital Acquisition (₹1,39,860 lakh / ₹1,398.6 Cr) – Announced November 2025, RBI-approved. Expected AUM addition of ~₹3,000 crore. Because why build slowly when you can just buy your way up?
Equity Raise of ₹535 Cr via CCDs (Oct 2025) – Convertible instruments that
One Response
Nice write up
In section 10. P&L breakdown, its mentioned PAT hasnt doubled like revenue did but i see PAT more than double.