UGRO Capital Limited

Financial Services — Credit Services · NSE

₹81.95−₹1.49 (−1.79%)

DalalBaazaar Score

74 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of UGRO Capital Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

UGRO Capital Limited, a non-banking financial company, engages in the lending business in India.

IndustryCredit Services

SectorFinancial Services

Employees2,095

Annual revenue₹1,408 Cr

How does it make money?

Turns over ₹1,408 Cr a year. Of every ₹100 of sales, about ₹12 reaches shareholders as profit, with ₹57 left at the operating level before interest, tax and depreciation. Each of its 2,095 employees supports ₹67.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin56.6%

Net margin12.4%

Revenue / employee₹67.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

BAJAJ FINANCE LIMITEDP/E 30.2x · ROE 17.8%

STATE BANK OF INDIAP/E 10.3x · ROE 15.2%

HDFC BANK LTDP/E 15.9x · ROE 13.8%

ICICI BANK LTD.P/E 18.1x · ROE 16.5%

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

ROCE5.8%

ROE6.0%

Peer median ROE16.5%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 23.5% and earnings to grow about 37.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+23.5%

Est. earnings growth+37.5%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +189% while net margin moved +52% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+189%

Margin effect+52%

DalalBaazaar Score

74/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.23 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

75/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

84/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

5.8x

3Y Median

13.5x

40 monthly readings · mean 22.9x · range 5.6x–53.7x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 57% below its 3y median of 13.5x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 66% below the peer median of 17.0x.

vs. its own history

Cheap

13.5x median over 40 months · -57%

vs. sector peers

Cheap

17.0x median of 4 peers · -66%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

5.8x

P/B

0.43x

EV/EBITDA

13.5x

PEG

0.09

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 5.8x the stock trades 57% below its own median of 13.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Margins are compressing
EBITDA margin has slipped from 58.3% to 56.6% over 3 years.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 116% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 57% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 66% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 58.3% to 56.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 32% a year✓ 42.4% CAGR
Latest reported year was 6.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 55%✓ 56.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Return on equity stays above 8%✗ 6.0%
For a lender this is the cleanest single read on whether the book is being grown profitably.
4Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.
5Valuation vs its own median of 13.5x✓ 5.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹1,252 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.8x

Cheap

Cheap against the generic band

P/B Ratio

0.43x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹14.22

Profitable

Profitable on a per-share basis

ROE

6.0%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

3.74x

High

High leverage

Revenue Growth (YoY)

6.7%

Modest

Modest growth

Profit Growth (YoY)

33.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹171 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹81.95

P/E (Forward)

4.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

34.2%

Good

Healthy core-business profitability

Net Margin

24.0%

Good

Strong bottom-line conversion

Current Ratio

1.47

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

81.8 / 85.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

49.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹488 Cr	₹707 Cr	₹964 Cr	₹1,408 Cr	+42.4%
EBITDA	₹284 Cr	₹443 Cr	₹583 Cr	₹797 Cr	+41.0%
EBITDA Margin	58.3%	62.6%	60.5%	56.6%	—
PAT (Net Profit)	₹40 Cr	₹119 Cr	₹144 Cr	₹175 Cr	+63.8%
EPS	₹5.55	₹12.93	₹14.41	₹13.18	+33.4%
ROE	4.0%	8.3%	7.0%	6.0%	—
ROCE	7.6%	7.1%	6.4%	5.8%	—
Total Debt	₹3,149 Cr	₹4,653 Cr	₹6,904 Cr	₹10,782 Cr	+50.7%
Free Cash Flow	-₹1,261 Cr	-₹1,575 Cr	-₹2,527 Cr	₹171 Cr	—

🟢 Revenue has grown at 42.4% a year over 3 years.

🟢 EBITDA has grown at 41.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 58.3% to 56.6% over 3 years (-1.7 pts).

🟢 PAT (Net Profit) has grown at 63.8% a year over 3 years.

🟢 EPS has grown at 33.4% a year over 3 years.

🟢 ROE has risen from 4.0% to 6.0% over 3 years (+2.0 pts).

🔴 ROCE has fallen from 7.6% to 5.8% over 3 years (-1.8 pts).

🔴 Total Debt has grown at 50.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹1,261 Cr to ₹171 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹14,075 Cr

Total Liabilities

₹11,169 Cr

Total Debt

₹10,782 Cr

Cash & Equivalents

₹1,272 Cr

Operating Cash Flow

₹214 Cr

Capex

-₹43 Cr

Shareholding (proxy)

Institutional Holding

14.0%

Insider Holding

47.3%

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹154

+87.9% vs CMP

Target Range

₹154 – ₹154

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

1 mixed5 general

Compare with UGRO CAPITAL

Equitymaster, 16 Oct

UGRO Capital Reports Q1 Standalone Net Profit of ₹60.71 Crore vs ₹34.13 Crore YoY

Sahi, 04 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Ugro Capital Share Price: 7 Stock Signals to Watch Now

Univest, 05 Oct

UGRO Capital is ditching low-yield lending; founder on plan to triple returns by FY29

The Economic Times, 22 Apr

UGRO Capital Limited's (NSE:UGROCAP) Business And Shares Still Trailing The Market

Simply Wall Street, 04 Feb

Ugro Capital Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 27 Aug

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong15.9/20

🟢Financial HealthStrong17/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate8.9/15

🟢ValuationAttractive13.2/15

🔴RiskHigh4.4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 32% a year42.4% CAGR
✓EBITDA margin holds above 55%56.6%
✗Return on equity stays above 8%6.0%
✗Interest cover stays above 3x1.8x
✓Valuation vs its own median of 13.5x5.8x today