Any current/future new fundraising through debt or equity?

UGRO Capital has completed a significant capital raise totaling Rs 1,332 crore, comprising Rs 275 crore as CCD (Compulsorily Convertible Debentures) and Rs 1,057 crore in warrants. This capital raise is structured to fulfill the company's growth capital needs for the current year and the next two years. The capital raise is staggered, with dilution to existing shareholders occurring gradually as warrants convert. The company does not currently plan additional equity raises but may consider right issues or preferential issues in the future to allow wider investor participation. On the debt side

Future growth expectations in sales/revenue/volumes?

UGRO expects minimum AUM growth of ₹3,000 crore annually as per FY22-FY24 trajectory. Targeted branch expansion from 75 to 250 branches by end of FY25 to drive higher loan origination. Growth focus on higher-yielding segments like micro enterprises secured loans (ticket size ~₹8-10 lakhs at ~20% yield). Plans to scale volumes with operational efficiency and past investments in technology, people, and physical infrastructure. Collaboration with ecosystem partners and expansion in digital embedded financing via acquisitions like MyShubhlife. Aim for 10-15% additional growth above ₹3,000 crore ba

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

Profit growth is expected to significantly outpace AUM growth for the next 3 years. FY24 profit rose to ₹120 crore from ₹40 crore in FY23, a 3x increase, with further substantial growth anticipated. EPS is projected to improve beyond the current ₹13, potentially reaching around ₹19-25 within 2 years after capital dilution and profit growth. ROE is targeted at 18%, which would support superior EPS performance going forward. The raised capital of ₹1,330 crore will enhance net worth and support profit expansion, contributing to EPS growth. Management aims to reach a sustainable ROA of 4

Ugro CapitalQ4 FY24Finance

Ugro Capital Q4 FY24 Earnings Call Analysis

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

Price: ₹82.4P/E: 9.1Market Cap: ₹1.3K CrSector: Finance

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

Yes

Order

N/A

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

UGRO expects minimum AUM growth of ₹3,000 crore annually as per FY22-FY24 trajectory.
Targeted branch expansion from 75 to 250 branches by end of FY25 to drive higher loan origination.
Growth focus on higher-yielding segments like micro enterprises secured loans (ticket size ~₹8-10 lakhs at ~20% yield).
Plans to scale volumes with operational efficiency and past investments in technology, people, and physical infrastructure.
Collaboration with ecosystem partners and expansion in digital embedded financing via acquisitions like MyShubhlife.
Aim for 10-15% additional growth above ₹3,000 crore baseline from high-yield segments with optimized credit costs.
Cost of customer acquisition expected to reduce with scale, aiding cost-to-income ratio improvement.
Growth aligned with increasing ROA towards 4% exit by FY25/FY26, focusing on sustainable profitability besides volume.

Margin guidance

Category 1

Profit growth is expected to significantly outpace AUM growth for the next 3 years.
FY24 profit rose to ₹120 crore from ₹40 crore in FY23, a 3x increase, with further substantial growth anticipated.
EPS is projected to improve beyond the current ₹13, potentially reaching around ₹19-25 within 2 years after capital dilution and profit growth.
ROE is targeted at 18%, which would support superior EPS performance going forward.
The raised capital of ₹1,330 crore will enhance net worth and support profit expansion, contributing to EPS growth.
Management aims to reach a sustainable ROA of 4% over 8-10 quarters, up from 2.3%, supporting higher profitability.
Cost to income ratio is expected to decrease from 54% to around 45%, improving operating margins.
Overall, the company forecasts steady profit and EPS growth driven by efficient capital utilization, higher yields, and diversified product mix.

See what Ugro Capital management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

UGRO Capital has completed a significant capital raise totaling Rs 1,332 crore, comprising Rs 275 crore as CCD (Compulsorily Convertible Debentures) and Rs 1,057 crore in warrants.
This capital raise is structured to fulfill the company's growth capital needs for the current year and the next two years.
The capital raise is staggered, with dilution to existing shareholders occurring gradually as warrants convert.
The company does not currently plan additional equity raises but may consider right issues or preferential issues in the future to allow wider investor participation.
On the debt side, UGRO is issuing around Rs 1,300 crore of debentures, preferentially allotted to certain investors.
They aim to reduce borrowing costs over the next 8-10 quarters due to increased scale and capital, expecting about 75 basis points decrease in cost of borrowing.
No explicit announcements of future fundraising beyond this have been mentioned.

Order book

The transcript does not provide specific details regarding U GRO Capital Limited's current or expected order book or pending orders. The discussion primarily focuses on financial performance, capital raising, AUM growth, ROA calculations, acquisition strategy, credit cost management, distribution channels, and investor-related queries. No explicit mention of order book status or pending orders is made in the provided pages.

See what Ugro Capital management said on order book — free account, 30 seconds.

Capex plans

Yes

- UGRO has invested significantly in technology, physical infrastructure, and people over the last 2-3 years during its growth phase. - Recent capital raise of ₹1,330 crore (in form of CCD and warrants) strengthens their capital base, enabling the company to support growth without immediate further capital investment. - The management indicated no need to repeat earlier large investments in technology or infrastructure, aiming instead for operational efficiency and accelerated growth with existing assets. - Expansion planned from 105 branches to almost 400 branches in the next 2 years, indicating continued capital deployment in physical branch expansion. - Acquired MyShubhlife to enhance embedded financing capabilities and scale digital lending platforms. - Focus on scaling existing investments, rather than new major capital expenditure, to meet growth demands sustainably. Overall, UGRO is leveraging past capital investments and newly raised funds for scaling up operations and growth rather than initiating fresh large-scale capex.

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