Shares of Spandana Sphoorty hit the lower circuit after reporting a net loss of ₹394 crore for the quarter ended December 2024, compared to a profit of ₹118.27 crore in the same quarter the previous year. The company’s consolidated net loss also widened to ₹440.19 crore in the quarter ended December 2024 from a net profit of ₹127.40 crore in the corresponding quarter last year.
The board of Spandana Sphoorty approved raising funds through qualified institutional placement (QIP) for an aggregate amount not exceeding ₹750 crore. The company’s assets under management (AUM) declined by 14% year-on-year to ₹8,936 crore from ₹10,404 crore in Q3 FY24, and disbursement plunged by 43% year-on-year to ₹1,443 crore.
CEO and Managing Director Shalabh Saxena mentioned that the microfinance sector has been facing challenges in the current financial year, impacting Spandana Sphoorty as well. This led to a deliberate slow-down in disbursements to improve portfolio quality and center meeting discipline. The company incurred impairment costs amounting to ₹666 crore, resulting in a reported loss of ₹440 crore for the quarter.
Nuvama Institutional Equities noted a sharp slowdown in disbursals and an increase in operational expenses to address attrition and strengthen collections. The brokerage expects MFI stress to peak in Q1 FY26 and has maintained a hold call on the stock with a target price of ₹335, down from ₹520 previously.
ICICI Securities highlighted deteriorating asset quality due to borrower overleverage and operational challenges, resulting in subdued earnings for Spandana Sphoorty. The brokerage remains positive about the improvement in collection and anticipates a sharp improvement in earnings from Q1 FY26 onwards if the current trend sustains. ICICI Securities has maintained its add call on the stock with a target price of ₹375, reduced from ₹500 earlier.
As a result of the financial performance, Spandana Sphoorty’s shares were locked in the lower circuit at ₹342.20 on the NSE, down by 5% as of 12:35 pm. On the BSE, the stock depreciated by 4.99% to ₹324.65.
(source: The Hindu Business Line)
