Any current/future new fundraising through debt or equity?

For FY24, U GRO Capital does not plan to raise any new equity; the INR 340 crores raised recently (in April-May) will be the only equity for the year. The company plans to raise approximately INR 2,500 crores of fresh debt during FY24 to fund balance sheet growth. Capital adequacy stood at around 20% as of March 31, 2023, which is sufficient for the year's growth capital requirement. A potential next round of equity is planned around mid-2024 for growth capital. The company aims to maintain capital adequacy above current levels throughout FY24. They emphasize relying on debt for growth capital

Any current/future capex/capital investment/strategic investment?

For FY24, U GRO Capital is not planning any further equity raise; the INR 340 crores raised recently (April-May) will be the only equity infusion in the year. The company plans fresh debt raising of about INR 2,500 crores to fund balance sheet growth. They have built upfront capacity, including tech and people infrastructure, designed for sizable organizational growth. Plan includes expanding microenterprise branches by around 20 in FY24, which are low-cost branches, maintaining flat opex. The company is focused on building a generational institution with sustained capital adequacy (~2

Future growth expectations in sales/revenue/volumes?

UGRO Capital aims to achieve an AUM of INR 10,000 crores in FY24, up from INR 6,000+ crores in FY23. Disbursements planned around INR 6,400 crores in FY24, nearly doubling from last year’s INR 7,200 crores gross disbursement (growth continuation). Long-term aspirational AUM target of INR 20,000+ crores by FY25 remains intact despite minor shortfalls in the course. The company plans to steadily increase off-book AUM to 50% by 2025, currently around 40%. Growth driven by scaling Lending-as-a-Service model, expanding direct-to-customer channels, and leveraging technology like GRO Score 3.

Future growth expectations in earnings/operating earnings/profits/EPS?

UGRO Capital reported a fourfold increase in Profit Before Tax (PBT) from INR 20 crores in FY22 to INR 83 crores in FY23. Profit After Tax (PAT) rose from INR 14 crores to INR 39 crores, or INR 60 crores adjusted for deferred tax asset write-off. The company expects to achieve double-digit Return on Equity (ROE) in FY24, aiming for high double-digit ROE by FY25. They anticipate bottom-line performance to grow 2.5x to 3x from the current INR 84 crore level as AUM approaches INR 10,000 crores. Cost-to-income ratio targets a reduction to around 47% by FY25, supporting improved earnings efficiency

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Ugro Capital LtdQ1 FY23Finance

Ugro Capital Ltd Q1 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹100P/E: 8.8Market Cap: ₹1.5K CrSector: Finance

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→UGRO Capital aims to achieve an AUM of INR 10,000 crores in FY24, up from INR 6,000+ crores in FY23.
→Disbursements planned around INR 6,400 crores in FY24, nearly doubling from last year’s INR 7,200 crores gross disbursement (growth continuation).
→Long-term aspirational AUM target of INR 20,000+ crores by FY25 remains intact despite minor shortfalls in the course.
→The company plans to steadily increase off-book AUM to 50% by 2025, currently around 40%.
→Growth driven by scaling Lending-as-a-Service model, expanding direct-to-customer channels, and leveraging technology like GRO Score 3.0.
→Target ROA of 3.1% and ROE of about 10% in FY24, moving towards high double-digit ROE by end of 2025.
→Branch expansion to about 250 across India planned over 24-30 months, focusing on micro enterprise loans.
→Capital infusion and robust tech infrastructure support aggressive growth strategy and scaling.

Margin guidance

Category 3

→UGRO Capital reported a fourfold increase in Profit Before Tax (PBT) from INR 20 crores in FY22 to INR 83 crores in FY23.
→Profit After Tax (PAT) rose from INR 14 crores to INR 39 crores, or INR 60 crores adjusted for deferred tax asset write-off.
→The company expects to achieve double-digit Return on Equity (ROE) in FY24, aiming for high double-digit ROE by FY25.
→They anticipate bottom-line performance to grow 2.5x to 3x from the current INR 84 crore level as AUM approaches INR 10,000 crores.
→Cost-to-income ratio targets a reduction to around 47% by FY25, supporting improved earnings efficiency.
→With stable borrowing costs and planned capital raise in mid-next year, UGRO is positioned for sustained profit growth aligned with AUM expansion.
→Earnings growth driven by scalability, robust underwriting, and cost control as branches mature and AUM increases.

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Fundraise plans

Yes

→For FY24, U GRO Capital does not plan to raise any new equity; the INR 340 crores raised recently (in April-May) will be the only equity for the year.
→The company plans to raise approximately INR 2,500 crores of fresh debt during FY24 to fund balance sheet growth.
→Capital adequacy stood at around 20% as of March 31, 2023, which is sufficient for the year's growth capital requirement.
→A potential next round of equity is planned around mid-2024 for growth capital.
→The company aims to maintain capital adequacy above current levels throughout FY24.
→They emphasize relying on debt for growth capital this year while equity raises will happen next year as they move up the financing ladder.

Order book

The transcript from the provided pages does not explicitly mention current or expected order book or pending orders. However, relevant insights related to business growth and demand include: - There was more demand than the QIP (Qualified Institutional Placement) size decided, indicating strong investor interest and potential business growth. - The management noted a robust pipeline in infrastructure lending with disbursements close to INR 600 crores in March and a full-year disbursement plan of INR 6,400 crores. - Expectation to achieve an AUM (Assets Under Management) of INR 10,000 crores for FY24. - Continued confidence in significant growth ahead, expecting potentially a 10-fold increase in some market segments in the next 2-3 years. - The company is expanding off-book lending with a goal of 50% off-book and 50% on-book AUM by 2025, indicating expanding business scope. No specific figures for order book or pending orders are provided.

Capex plans

Yes

→For FY24, U GRO Capital is not planning any further equity raise; the INR 340 crores raised recently (April-May) will be the only equity infusion in the year.
→The company plans fresh debt raising of about INR 2,500 crores to fund balance sheet growth.
→They have built upfront capacity, including tech and people infrastructure, designed for sizable organizational growth.
→Plan includes expanding microenterprise branches by around 20 in FY24, which are low-cost branches, maintaining flat opex.
→The company is focused on building a generational institution with sustained capital adequacy (~20%) to support growth without immediate capital stress.
→No explicit callout of large-scale strategic acquisitions or capital-intensive investments currently, emphasis is on scaling organically through disbursement and AUM growth backed by existing capital and debt.

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