Induction motors (IMs) are one of the most widely used motor types in the industry due to their low cost, high reliability, and efficiency. Nevertheless, like other types of AC motors, they are prone to various faults. In this article, a low-cost embedded system based on a microcontroller with the ARM Cortex-M4 core is proposed for the extraction of stator winding faults (interturn short circuits) and an unbalanced supply voltage of the induction motor drive. The voltage induced in the measurement coil by the axial flux was used as a source of diagnostic information. The process of signal measurement, acquisition, and processing using a cost-optimized embedded system (NUCLEO-L476RG), with the potential for industrial deployment, is described in detail. In addition, the analysis of the possibility of distinguishing between interturn short circuits and unbalanced supply voltage was carried out. The effect of motor operating conditions and fault severity on the symptom extraction process was also studied. The results of the experimental research conducted on a 1.5 kW IM confirmed the effectiveness of the developed embedded system in the extraction of these types of faults.