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Usha Financial Services Ltd

| Quarterly Financial Results Q3 FY 2025-26

BULLISH SENTIMENT

Report Source

⬤7th Feb 26

Summary : USHA Financial Services reports strong Q3 FY26 results, driven by revenue growth and new product launches, while transitioning to Ind AS and Main Board compliances.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Finance costs: Q3 FY26: 603.71 Lakhs; 9M FY26: 1,807.37 Lakhs.
  2. Fees and commission expense: Q3 FY26: 72.74 Lakhs; 9M FY26: 187.59 Lakhs.
  3. Impairment on financial instruments: Q3 FY26: 65.29 Lakhs; 9M FY26: 413.00 Lakhs.
  4. Employee Benefits Expenses: Q3 FY26: 101.10 Lakhs; 9M FY26: 282.52 Lakhs.
  5. Depreciation and Amortisation Expenses: Q3 FY26: 40.39 Lakhs; 9M FY26: 120.03 Lakhs.
  6. Other Expenses: Q3 FY26: 113.51 Lakhs; 9M FY26: 379.18 Lakhs.
  7. Interest income: Q3 FY26: 1,865.14 Lakhs; 9M FY26: 5,221.57 Lakhs.
  8. Fees income: Q3 FY26: 52.55 Lakhs; 9M FY26: 115.03 Lakhs.
  9. Other operating income: Q3 FY26: 0.45 Lakhs; 9M FY26: 13.04 Lakhs.
  10. Other Income: Q3 FY26: 3.75 Lakhs; 9M FY26: 11.25 Lakhs.
  11. Equity as per IGAAP (31.03.2025): 21,115.09 Lakhs.
  12. Equity as per Ind AS (31.03.2025): 20,850.61 Lakhs (post-transition adjustment).
  13. Standalone unaudited financial results presented.

Corporate Overview

  1. Operates on a PAN India basis.
  2. Transitioning from IGAAP to Indian Accounting Standards (Ind AS).
  3. Moving from NSE SME Emerge Platform to Main Board compliances.
  4. Subject to RBI directions for lending policies.
  5. Compliance with SEBI Listing Obligations and Disclosure Requirements.
  6. Non-Banking Financial Company (NBFC) primarily engaged in lending to Financial Institutions, Corporates, and Individuals.
  7. Positive and growth-oriented, focusing on compliance and strategic expansion.
  8. Financial Institutions, Corporates, and Individuals.
  9. Primarily interest income, fees income, and other operating income.
  10. No separate reportable segments identified.
  11. Launch of a new Gold Loan product.
  12. Approval of a Digital Lending Application.
  13. Issuance of Non-Convertible Debentures (Series P).

Risk Factors

  1. Managing expected credit losses.
  2. Evolving RBI regulatory compliance.
  3. Ind AS transition adjustments impact.
  4. Increased regulatory scrutiny.

Key Drivers

  1. Strong revenue and profit growth.
  2. New Gold Loan product launched.
  3. Digital Lending application approved.
  4. Transition to Main Board compliances.

Auditor’s Report

  1. Unmodified review conclusion, stating no material misstatement found.
  2. Company's transition from NSE SME Emerge to Main Board compliances due to increased share capital.
  3. Shift from IGAAP to Indian Accounting Standards (Ind AS) from April 1, 2025.
  4. Previous period results (9M FY25, Q3 FY25) were not subject to limited review under previous IGAAP.

Board Commentary

  1. Approval for designating Managing Director as Chairperson.
  2. Appointment of a Debenture Trustee.
  3. Compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements), 2015.
  4. Transitioning to Main Board compliances due to increased share capital (> Rs. 25 crores).
  5. Adoption of Indian Accounting Standards (Ind AS) from April 1, 2025.
  6. Approved issuance of Non-Convertible Debentures on Private Placement Basis (Series P).
  7. Approved exercise of Call Option for 12% Secured, Redeemable NCDs (Series J).
  8. Approved CSR contribution for the FY 2025-2026.

Corporate Governance

  1. Managing Director designated as Chairperson.
  2. Audit Committee reviewed and approved financial results.

Management Discussion & Analysis

Future Strategy

  1. Diversifying lending products with the launch of Gold Loan.
  2. Embracing digital transformation with a new Digital Lending Application.
  3. Strengthening capital base through NCD issuance.
  4. Ensuring compliance with updated RBI and SEBI regulations.

Operational Focus Areas

  1. Adherence to RBI and SEBI regulatory frameworks.
  2. Managing credit risk, including Expected Credit Losses (ECL).
  3. Implementing digital lending solutions.
  4. Optimizing capital structure.

Performance Drivers

  1. Significant growth in interest income and overall revenue.
  2. Strong increase in Profit Before Tax (PBT) and Profit After Tax (PAT).
  3. Effective management of finance costs and total expenses.
  4. Strategic initiatives like new product launches and digital transformation.

Risk Control Measures

  1. Regular review and amendment of lending policies as per RBI directions.
  2. Ensuring full compliance with SEBI Listing Regulations.
  3. Proactive management of expected credit losses.

Critical Risks

  1. Regulatory changes and compliance requirements.
  2. Credit risk associated with lending activities and ECL provisions.
  3. Interest rate fluctuations affecting lending policies.